#35 - AUGUST 2010 by CyberMedia (I) Ltd

Vol 3 / Issue 11 / Aug 10

/`50

Ask The Investor

Investor of the Month

Entrepreneur of the Month

Pavan Krishnamurthy

A R Jayakumar

Devendra Shah

Ojas Ventures

KITVEN Funds

Parag Milk Foods

Barter Your Way to Success Amazing Businesses Around Autos

TECH CORNER

Open Source Software ANNOUNCING

Inspiring 50 SME Entrepreneurs

92 pages including cover

SHOWROOMS: Bangalore: 080 40209631-37, Ahmedabad: 079-30080999 093757 59275, Bellary: 08392 243594 / 93428 76404, Bhubaneswar: 0674 2354131 / 94370 33642, Bhopal: 0755-4280039 / 93031 00055, Chennai: 044 28232764 / 9342795056, Chandigarh: 0172 4660307 / 9317547666, Coimbatore: 0422-4359129 / 98422 20129, Delhi: 011 40638000 / 93508 75502, Goa: 9325051361, Guwahati: 0361 2734329/ 94350 36546, Hubli: 0836-2271194 / 93797 07617, Hyderabad: 040-27802602 / 98490 14270, Jamshedpur: 0657 - 2320370 / 94315 24051, Jaipur: 0141 2604189 / 99501 45104, Kolkata: 033-24191002 / 93398 77051, Kochi: 0484 - 3269383 / 93886 81284, Mangalore: 0824 2440141/ 99452 45097, Mumbai: 022 42766000 / 9004545558 , Maysore: 0821-2411782 / 92435 00697, Pune: 020-26120688 / 98909 55550, Tinsukia: 0374-2340591/94350 36547, Trivandrum: 93494 55501, Tirupathi: 0877 2281977 / 98661 48909, Vishakapatnam: 0891-2530770 / 93463 30770

Contents

BOARD OF ADVISORS N R Narayanamurthy

Chief Mentor, Infosys

Kanwal Rekhi

Chairman, TiE

Romesh Wadhwani Chairman & President, Wadhwani Foundation Gururaj ‘Desh’ Deshpande

20 Inspiring 50 SME Entrepreneurs

Chairman, Sycamore Networks

Saurabh Srivastava Chairman, Indian Venture Capital Association Kiran Mazumdar Shaw R Gopalakrishnan

Chairman & MD, Biocon Executive Director, Tata Sons

Philip Anderson

Professor of Entrepreneurship, INSEAD

Shyam Malhotra Editor-in-Chief Abraham Mathew President Prashanth Hebbar Senior Editor ANALYSTS Binesh Kutty Nimesh Sharma Shinjini Ganguli Shradha Mohanty OPERATIONS Ajay Dhoundiyal Product Manager Prasanna Srivastava Product Manager Debabrata T Joshi Manager Events VIjay Rana Design Anil John Photography

SALES & MA Jaideep Mario Gabriel Yogesh Bhosle Ankur Kalia Manas Mishra Kingshuk Sircar

MARKETING Associate VP National Sales Manager West North South South-East Asia

PRINT & CIRCULATION SERVICES Rachna Garga VP T Srirengan GM, Print Services Sudhir Arora Senior Manager Circulation Pooja Bharadwaj Assistant Manager, Subscriptions Sarita Shridhar Assistant Manager, Reader Service

Are you ready to join the Constellation of 50 who will inspire a legion of entrepreneurs who will steer Bharat to global excellence? TECH CORNER

OPPORTUNITY

54 Open Source Software

48 Barter Your way to success

By Kunal Dua

In an era when the industry is embracing the slogan, “cash conserved is cash earned” on its sleeve, barter is the strategy many think of. By Nimesh Sharma

Printed and published by Pradeep Gupta. Owner, CyberMedia (India) Ltd. Printed at International Print-O-Pack Limited, B-204-206, Okhla Industrial Area, Phase 1, New Delhi-20 Published from D-74, Panchsheel Enclave, New Delhi-17. Editor: Krishna Kumar. Distributors in India: Mirchandani & Co., Mumbai. All rights reserved. No part of this publication may be reproduced by any means without prior written permission.

OPPORTUNITY

64 Wood Plastic Composite

BANGALORE 205, 2nd Floor, # 73, Shree Complex, St.Johns Road, Tel: 43412333 CHENNAI 5B, 6th Floor, Gemini Parsn Apts, 599 Mount Road, Tel: 28221712 KOLKATA 23/54, Gariahat Road, Ground Floor, Near South City College, Tel: 65250117 MUMBAI Road No 16, D 7/1 MIDC, Andheri (East) Tel: 42082222 DELHI D-74 Panchsheel Enclave Tel: 41751234 PUNE Flat No. 9, F Block, Popular Heights 3 Koregaon Park Tel: 65000996 SECUNDERABAD #5,6 1st Floor, Srinath Commercial Complex, SD Road. Tel: 27841970 SINGAPORE 1, North Bridge Road, # 14-03 High Street Center Tel: +65-63369142 CORPORATE OFFICE Cyber House, B-35, Sec 32, Gurgaon, NCR Delhi-122001 Tel: 0124-4822222, Fax: 2380694

92 pages including cover 4

AUGUST 2010 | CONTENTS | DARE.CO.IN

OPPORTUNITY

24 Business Around Autos Hold on to your seats, because autos around the country are geared to take you for a ride of a different kind altogether. Business plans to better auto services are attracting more and more customers By Shradha Mohanty

With more than 2 million tons of plastic being produced in India every year and India's forest cover being 21% instead of an ideal 33%, is there a material that can substitute wood for its durability and that can substitute plastic for its ﬂexibility? By Nimesh Sharma SOCIETY

38 Business of Flags The sale of the Indian ﬂag is all set to rise by 20 percent this year. More and more people are buying to indulge in the festivities of the occasion Shradha Mohanty FUNDING

40 Your Questions... Your Banker Answers We bring to you direct answers to your queries on business loans, based on interactions with multiple bankers and banking consultants. By Nimesh Sharma

Contents ENTREPRENEUR OF THE MONTH

CONTEST

30 Devendra Shah, Parag Milk Foods

72 G-20 SME Finance Challenge Global community echoes SME funding woes and launches a ﬁnance competition with focus on innovative solutions for the world By Nimesh Sharma COLUMNS

18 Considering the Exit Route By Vijay Anand

37 The “Contented Entrepreneur” By Anurag Batra

43 India luckily hastened slowly By Paranjoy Guha Thakurta

With plans to take the Indian cheese and curds market head on, the company has touched a turnover of Rs 550 crore in the ﬁnancial year 2009-2010. Shah is the entrepreneur behind Parag Milk Foods, which deals in only 100 % cow's milk and milk products, and owns the 'Gowardhan' and 'Go' brand of dairy products. Shah talks to DARE about his entrepreneurial journey

46 “Open Innovation”– Fastest Emerging Way to Innovate By Jayesh Badani

52 From Entrepreneurship to Enterprise By Srikala Bhashyam

68 Advanced Technologies in Medicine By Hrishikesh Damle

83 Small Things Matter ASK THE INVESTOR

70 Pavan Krishnamurthy Partner, Ojas Ventures

INVESTOR OF THE MONTH

62 A R Jayakumar CEO, KITVEN Funds

By Rajaram Rajendran EVENT

28 SME Knowledge ForumSMEs Gear up for Growth 74 Headstart – Startup Saturday in July NEN

88 Doing good, the new way OTHERS

10 Exchange 16 Feedback 33 From the Blogs 80 Back of the Book

SMS: “DARE <your comments, questions or suggestions>” to 56677 Jayakumar has more than 23 years of experience in the field of banking and venture capital. Karnataka Information Technology Venture Capital Fund (KITVEN Fund) is committed to providing investments to the SME sector, especially in the field of information technology, biotechnology, and nanotechnology in Karnataka and in the process will help in bringing about competitive products which can move up the value chain. It is also involved in financing for growth and expansion of already established companies. 6

AUGUST 2010 | CONTENTS | DARE.CO.IN

Email: dare@cybermedia.co.in Website: www.dare.co.in Follow us at: http://twitter.com/daretostartup

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From the editor

Entrepreneurship is a ﬂow /Prashanth Hebbar

Entrepreneurs move from one state to the other in their relentless journey

Announcing: Inspiring 50 SME Entrepreneurs

uccessful entrepreneurship is an oxymoron. In this issue, you will read Anurag Batra talking about Contented Entrepreneurs bringing an interesting perspective. Entrepreneurship is not a goal. It does not have a beginning or an end. It is a ﬂow. When we talk of an entrepreneur being successful we are actually talking about her state at a particular point in time. Entrepreneurs move from one state to another state. In the beginning they are dreaming, optimistic and then they are on a mission to execute. Some other time they are intense about getting funding or seeing a deal through. yet another point in time they are hostile or benevolent. For an entrepreneur, the journey never ends; Always scouting for opportunities, measuring risks, readying resources, managing crisis, closing down ventures, throwing oneself in new ventures - an entrepreneur’s journey is ardous, relentless and adventurous. Yet most of us attach a high glamour value to entrepreneurship. However, we balk the moment we see the hard work hiding behind that eye-candy picture. I still remember a booklet I had read about “Being Your Own Boss,” when I was in college. It talked all about setting up a unit, getting permits, rais-

ing bank loans, ﬁnding suppliers and buyers. I do remember telling myself, “I can’t do all that.” Today, we have forums, get-togethers where people freely exchange ideas. There are competitions, venture capital clinics, credit guarantee funds, marketplace match makers and online exchanges. Life of an entrepreneurs have changed forever. Yet only a handful of entrepreneurs ﬁnd the scale that pitch them from being also-ran to path-breaking. Recognizing the fact that it so hard for people to make this quantum jump, Dare is launching a program to identify 50 Inspiring entrepreneurs who have shown exemplary vision and leadership in building a business and taking it to a position where they are now ready for the next quantum jump. Please read our announcement of this program on pages 20 to 22. As part of this initiative we will be going to the nooks and corners of the country scouring for inspirational stories. Stories that may be far more effective than “Be Your Own Boos” booklet and stand as a beacon to legions of new entrepreneurs in India.

Interact with me on Twitter @phebbar

DARE.CO.IN | BLOGS | AUGUST 2010 9

Exchange Submit exchange requests at: website: http://www.dare.co.in/ marketplace.htm OR email: dare@cybermedia. co.in or SMS ‘DARE <your msg>’ to 56677

AUGUST 2010 | EXCHANGE | DARE.CO.IN

Advanced technology available to recycle tyres As consultants we have available equipment that will convert rubber crumb to carbon black. Approximate cost £2.5m through two tons per hour. We have turnkey tyre recycling plants, prices subject to ﬁve to ten percent price movement: 2 tons per hour circa $2.5m 4 tons per hour Circa $3.3m 6 tons per hour Circa $4.4m 8 tons per hour Circa $5.4m Note these prices are for production and do not include handling equipment like fork lifts, tyre racking, etc. These plants will handle large truck tyres as well. We can, at an additional cost, colour the crumb. The plant removes all metals and automatically produces three grades of crumb which is automatically bagged. Possible assistance in selling the crumb can be arranged by separate agreement and also the carbon black facility. Please note our new site is currently under reconstruction. - Warwick Leopold

Need business development partner in BTL & communicaton I have over 15 years of top-of-theline experience in Corporate Films, Documentaries, Exhibition Design, Retail Design, Graphic Design, Corporate Identity and Brand Development. I am looking for a partner/afﬁliate who would like to team up with me and look after the business development while I take care of creatives and production. The person should ideally have relevant experience and contacts. We could look at a project basis arrangement or even a full-time startup. - Wizz Ace

Anybody interested in a project in the education space? I am an edupreneur and educational consultant and have various education-related startups ideas. Anyone interested in opening a college or run an education-based business in online (virtual) or real space, can reach me at my email id. - Prof. JS, Indore

Response I would like to connect with Prof J.S who expressed his interest in partnering with Edupreneurs in April 2010 issue of DARE Magazine. - Arun Kumar

Mentoring needed to start a food outlet in Bangalore I have been in touch with DARE from the ﬁrst edition onwards. I am very impressed with the response I get even today from DARE. I would like to start a food outlet in Bangalore. I have a masters in retail management from NIFTChennai and was always interested in food retail. I need some mentor or a person who is already in the business to guide me. I am doing my side of the research. Please help me out in this. - Nandhakumar B.S. Response We are already running a similar business in Delhi. We will be happy to connect. Send me your details with your business idea to my email. - Raja Guha

Starting business of solar products I am not a big player in the Indian electronics industry to invest in crores, but I want to start my own business based on importing solar products from China. I have no knowledge in importing any product and its associated intricacies like import duty, etc. Could you please guide me through the process? - Balraj Bhardwaj Response Hi friend, I am a graduation student from Kerala, I am having plans to start a Solar Photovoltaic power plant. I’ve got some information about this ﬁeld which I’ll share with you. First of all, if you are looking to start a ﬁrm trading in solar products, it’ll be better to start with a dealership of an existing company. By this, you’ll have many advantages. Firstly, you’ll be able to understand the technology. Your company will provide you the training. Secondly, you’ll be able to understand the market, the customer responses and the kind of market seg-

mentation. I need not tell you that a direct experience is much more than an advice by a consultant or a marketing research ﬁrm. Thirdly, you’ll be able to recognise the players in the market and the kind of marketing strategy they have. Lastly, you’ll get a wide range of contacts in this ﬁeld. Your fellow dealers and dealers of other companies in the same industry. This network will help you when you start your own company. Some companies in India offering dealerships are Shell Solar, Reliance Solar, Orb Energy, Tata BP Solar (not sure whether they are in photovoltaics, or they are in thermal). These are the best ones. One more thing, never go for Chinese supplies, they may be cheap but won’t offer the desired quality. You’ll get to know all these once you are in the business. Go ahead with your plans, this is a great industry. Feel free to contact me anytime at my email id. - Paul Varghese

Wanted Mentor Arti Power Ventures Pvt Ltd (APVPL) was set up in 2009 by Atin Kamble and Arti Kamble, with the focus of becoming an independent power producer (IPP). With the background of running a manufacturing unit in the food processing industry, they planned to diversify and get into power sector by setting up a hydro power plant. As a ﬁrst step towards becoming an independent power player, APVPL had applied for allocation in Arunachal Pradesh and were allotted two plants totaling 67 MW in Arunachal Pradesh by the Central Government. APVPL also has plans to add other power assets in its portfolio and become a full ﬂedged IPP. The company plans to add 10MW of Biomass plant based on rice husk in Chattisgarh, 15MW of windmill projects in Maharashtra, 5MW of solar plants each in Gujarat and Rajasthan (Totaling 10MW) and the Company is exploring possibilities of setting up a gas-based power plant as well. It 12

AUGUST 2010 | EXCHANGE | DARE.CO.IN

Marketer required for herbal Unani aphrodisiac Altaf Pasha, I have an ancient traditional formula to improve sexual life of married men. This medicine is from Unani and contains 65 herbs. I require a person or an organization who can help me with medicine product registration and get both manufacturing and trade licence and do global marketing. Please contact me on email. - Raghunandana R. plans to have a total of 150MW of assets under commissioning by March 2011 and 500MW by March 2013. The Company under the leadership of the dynamic duo; Arti & Atin, has huge plans for scaling up the business and creating an entity to reckon with in the power sector with prime focus on renewable energy. About the promoters Dynamic, hardworking, opportunistic and aggressive couple, Atin and Arti started their career by setting up a food processing unit in 2002. The company is largely into making ‘farsaan’ items which are sold under the brand name ‘Arya’ and is available all over Maharashtra. It is tying up with distributors in other states as well to increase their geographical presence. It is also getting into retailing with independent stores planned out at 14 airports across the country. Started from scratch, the company is now a `40 crore turnover entity. Both Atin and Arti are graduates and belong to business families, wherein they have experience in running a shoe manufacturing company and resorts at multiple locations. We are seriously looking for mentors and equity partners - Atin Kamble

Tiffin service in Jaipur— scale up ideas and opportunities I am running a tiffin service in Jaipur for the last six months, catering to a large student community besides office-goers. This has been a dream for a long time, but I got to cherish it after I lost my job in the recession. I wish to scale up further and eventually start my own brand of fast food, specializing only in one product. I am looking for

help from mentors and guides for making it into a reality. By the way I had started my tifﬁn centre with no huge investments. I can be contacted on my mobile and email id. - Appoorv Saxena

Partner required for a publishing vertical I am running a BPO concern in the vertical of publishing. Lately, we have had a partnership with a US-based concern, for which I am looking forward for a partner, who can hold 49 percent shares. The business is based out of Coimbatore. - Saravanan Response Contact Me - Vijay Send me the details. I want to join you. I am staying in Mumbai. Ishwar Jivani

New startup for retail services I am planning a startup which is into retail services or consulting. Are there any companies or individuals in this business in India? If you are interested to send me suggestions or want to partner, please get in touch. - Shrinivas M Bakale Response Send me the details. I want to join you. I am staying in Mumbai. - Ishwar Jivani

Daring entrepreneurs sought to globally expand business The product is being used since last 40 yrs yet only two companies, one in Europe and the other in Asia, are manufacturing it. Very closely guarded technology. Application and manufacturing are unknwon in USA, Canada, East Europe, Japan, and

Brazil, etc. Capital required about `15 lakhs for production of 100 tons/ year. Highly proﬁtable (minimum 60 percent). Transferred technology to one company in Asia, manufacturing since ten years for captive consumption. If any daring entrepreneur willing to convince the users of above mentioned countries to evaluate the product, please contact me. All the details of possible users and the uses of the product will be supplied. - Sanjay Mukherjee Response Congratulations on empowering the entrepreneurs of India. I would like to have contact details of Sanjay Mukherjee who had put up an enquiry in the Exchange section of June 2010 issue. - Rohith.R Azyme Biosciences Pvt Ltd

Seeking funding for tech startup Seeking funding for tech startup with fully built product in hand. Product is niche, feature-rich with huge market size ready to be tapped. I am hoping to raise one to two crores to launch the product. - Omprakash Visvanathan

Looking for entrepreneur to lead an energy company We are a one-and-a-half-year old company working in the solar energy space. The company has started generating revenues now. We are looking for an enthusiastic entrepreneur to drive it aggressively to the next level. Here are the required qualities: 1. Based out of Bangalore 2. Ability to drive execution by spending full time

3. Electrical (engineering) background and passion in the (solar/ wind) energy business 4. Long term and high goal commitment 5. Ability to contain costs - Raghavendra Ijjada Response I am from Kolkata and I have founded my own company in the ﬁeld of educational robotics. I always wanted to be in the solar power space and after reading about you guys in DARE, I am more than curious to know what you people have come up with? Manoj I am a budding entrepreneur looking at making a name and place in the solar energy space in Bangalore and then rest of Karnataka. Please contact me via email. - Sharath I am doing my bit in energy-saving and solar energy in Mumbai. I am a ﬁrst generation entrepreneur with a lot of enthusiasm. Do let me know if you foresee any possible alliances. - Rathin Vyas

Looking for business partners, co-founder for startup venture I am looking out for a business partner, co-founder for my startup venture, from Mumbai. Theme of the website is to upload and download question papers for previous years. In case if you are interested drop me a mail. - Arun Kumar

Investors required for a booming business I am looking for investors willing to invest about `50,00,000/- in an auto business being run by me for the past

Partners required for setting up a vocational training center I have been working in the development sector in the area of sustainable livelihood for the last 15 years in Madhya Pradesh with a long term presence in Mandla (130 villages) and Bhopal city slums. We have a federation of 165 NGOs in Madhya Pradesh and have a close network of more than 45 like-minded NGOs. We are keen to set up a vocational training center for people with disabilities and ex-servicemen leading to employment in the corporate sector or self- employment. We are looking for experts, partners, ideas, advice and mentors on the subject to proceed further. - Anand

four years. We have been in the automobile business for the last 80 years; I being the third generation. The investment is in liquid capital goods (stocks), the investment is safe as the goods can be liquidated in a very short time frame to raise the entire amount invested. Assured returns to the investor are `18,00,000/- per year on an investment of `50,00,000/-. The advantage being that since the `50 lac investment is in stocks and is always liquid, the risk factor is negligible. - Sharat Sharma

Want investor and team members for a rural healthcare project I have a concept on Remote Healthcare Services–an end-to-end healthcare delivery system for the developing world. I am looking for people who want to be a part of the core team and also angel funding to kick off the pilot project. - Dr. Sanjay Sharma Response Kindly contact me regarding your idea. I was interested in a similar project. - Himanshu Goyal

Marketers required for kids’ 3D products in India We are a company with a ﬁrst of its kind 3D products for kids. Looking for sales and markting on proﬁt-sharing basis. - Rajshekar

SEO, SEM, SMO, PPC and website/e-commerce development services We are an innovative information technology (IT) company in India which provides services like search engine optimization (SEO), pay per click (PPC) marketing, social media optimization (SMO), link building, website design and development using content management systems (CMS) and e-commerce website design and development. We are looking for potential customers, partners and resellers to work with. Please feel free to contact me in case of any query. Amitava Sen DARE.CO.IN | EXCHANGE | AUGUST 2010 13

Looking for investor for a fouryear-old software company We are a four-year-old established ERP, SaaS, PaaS Web 2.5 Enterprise Product company having ERP, CRM, SCM, HRMS, Payroll, Finance, Quality Management, Production and Production Planning Modules and over 25 customers across India. We are seeking a strategic investor or looking at interesting merger/sale/ capital raising oppurtunity. Interested parties please contact URGENTLY!! - Akshay Shah

Partners required to set up an e-waste management project I am currently working on a plan to set up an e-waste management project in Bangalore. If somebody is interested and would like to join me, kindly contact me giving brief details of your experience and strengths. - Umang Agarwal Response I am interested in this idea. Can I have your contact details? - Nipurna I am an engineer and a Management graduate residing in Mumbai. I am currently doing research on e-waste recycle processes and would like to start the project soon. Kindly let me know about the ﬁrm/project. - Mayur Talreja I am a software engineer currently working in Bangalore. I am interested in your project and would deﬁnitely like to have a meeting with you regarding the same. Looking forward to a positive response from your side. - Abhishek Sharma

Looking for people interested in doing bamboo business on a large scale I am looking for individuals, private or public limited companies who would like to get involved with us in doing bamboo business on a large scale. I am basically based in London and have access to UK and EU markets. - Pranab Debnath 14

AUGUST 2010 | EXCHANGE | DARE.CO.IN

Looking for funding for future PC - CABTOP I am a housewife and have invented a new generation of PC with my simple thoughts. The DSIR, Govt. of India supported this Innovation. Meaning “Cabinet on Top”, this Cabinet has the base at bottom and moveable cabinet ﬁtted with the support of pivot mechanism on its base. The PC parts such as monitor, mother board (with processor, RAM and addon cards), Hard Disk, SMPS, Tuner Cards(AV, S Video and TV), DVD writer, speakers, USBs are arranged in a single unit and called CABTOP. Please search in Google as Cabtop Bhargavi. You will get more articles on this CABTOP. Presently I am looking for VC for three to six crores for funding. For further query please mail me or call me. - T Bhargavi I would like to introduce ourselves as manufacturers of bamboo-based products e.g. prefab bamboo structures, treated bamboo poles, bamboo blinds, garden elements – Gazebo, Pergola, fencing and other value-added products, etc. All our products are appropriately treated against borer, termite to give longer life to bamboo. We can supply you the products as per your requirement. You can contact us at my email. - Ms. Jyotsna Rajpal Response I am interested in the bamboo business. I see a lot of potential in bamboo products in the years to come. We can have a web meeting and discuss the possibilities. Please drop a mail if you ﬁnd me suitable for the business. Looking forward to hear from you soon. - Abhishek Sharma

Assistance offered for paper recycling equipment, training, etc We are dealing with waste paper recycling program since last 15 years and have designed a cost-effective model for waste paper recycling/ hand-made paper- making suitable for NGO, schools and colleges. If anybody wants any assistance with regard to paper recycling equipments, training, installation, etc. - KP Bikal Response Would you please provide me the contact details of KP Bikal who posted “Assistance offered for waste paper

recycling projects” in the Exchange column in the June issue? - Via SMS

Guidance needed to make a pvt ltd or ltd company I have a hearing aid business in Kolkata and now I want to make it a Pvt. Ltd. or ltd. company. So I need professional guidance from individuals or bodies in Kolkata. Please contact me with fee structure in total. - Krishna Gopal Sengupta Response Your current turnover, anticipated turnover, the purpose or reason to be a corporate, etc are needed to quote. Mail to me - Balasundaram Kandasamy

Information needed to start an import business from China I am not a big player in the Indian electronics industry to invest in crore, but I want to start my own business based on importing solar products from China. I have no knowledge in importing any product and its associated intricacies like import duty, etc. Could you please guide me through the process? - C L Joshi Response You can specify your details. - Gaurav Shah

DISCLAIMER: Due to a big deluge of exchange requests from our readers, we had to restrict the number of requests being published in the magazine to include new, broad-scoped and higher-on-quality requests. www. dare.co.in/marketplace.htm

www.dare.co.in | email: dare@cybermedia.co.in | SMS ‘DARE <your msg>’ to 56677

feedback

Will the helmet industry bloom now?

Happy shopping!!!

Well not very sure if Helmets sold

Vehicle Bulletproofing

on the road side meet all the safety

I learnt for the ﬁrst time that there is

standards.

a service that makes a vehicle bullet

- Neelima

So it is a good idea that the indus-

proof. I read once that if you want to

try would also be organized as well as

excel in business you have to stand

the safety levels are addressed.

out or at least be unique in your own

Coming back to the current

way, like this one.

problem, probably designer helmets

- Mark Josh

could be introduced. If the idea is liked by youth you can expect even the pillion rider wearing one. Some

Ice Cream Industry in India

of the ideas that may catch youth's

Your article does justice to the sub-

attention are:

ject. I like the way you presented

1. Light weight

the Ice cream scenario in India, and

2. Fold it and pack it up in

the opportunity for small business

college bag.

entrepreneurs therein. Well written!

3. Copy a design from some Hollywood ﬁlm. - Bharat

Mystery Shop Companies

Best Wishes. - Anil Synergy Resources (BrainBee)

There are loads of other companies

The coming of the social commerce websites.

in India which are into mystery shop-

Hey congratulations. It's a really nice

ping. Some of them are :

concept. I really admire you.

Kaiz Consultancy

I am an IITian, I have read so many

SRS India

business startup ideas but the way

Onion Insights

you have explained the things are re-

HS Brands International

ally awsome. All the best to Mydala.

Just check these out in google and

com team.

you can get the links.

- Via SMS

FEEDBACK FOR THE JULY 2010 BANK LOAN SPECIAL ISSUE http://twitter.com/adarshpillai/statuses/18834217868

AUGUST 2010 | FEEDBACK | DARE.CO.IN

DARE doing a good job! I stay in Pune and as I saw your first DARE magazine at Crossword, at Gold adlab, Kalyani Nagar, I bought that

October

issue

Narayan

Murthy and Kiran Shaw. I buy DARE regularly and missed only the June 2009 issue. It is a great idea and something really different from other magazines. Thank you for such a good publication. I have quit my job and started my home loan consultancy now. - Avinash Synergy Resources (BrainBee)

Opportunities in Luxury Child Birth and Infant Care in India This article is too naive in thinking that a 5-star birthing suite is necessarily what mothers want. Actually it is these so-called luxury suites that have the most c-section rates in India, nearly 70 percent. What mothers need during labor and childbirth is a caring, empathetic and supportive environment where she is respected and allowed to give birth on her own. Today, even when a mother and the baby are healthy, the medical system forces her to agree to procedures, drugs, etc, by feeding on her natural apprehensions for a healthy baby. Women today do not know what it is to give birth to their babies - rather doctors are "delivering" their babies. Most of the luxury birthing centers do not take the time or effort to teach the mothers how to breastfeed, or to bond with their babies. In fact, many actually suggest formula food. So the answer is not in having a 5-star birthing room, rather bringing back the respect for the mother; constant, individual attention and empower them to give birth on their own. Certainly, 70 percent of all mothers and babies cannot be in danger, so why are c-section rates in urban cities and towns in India as high as 70 percent, if not more? - Krishnan Sakotai

DTC doing no good to the common man Refer to “Direct Taxes Code: revised

major cause of worry for most of us.

of levying new taxes, increasing the

discussion paper clears the air” (Dare

The skyrocketing prices of essential

price of essential public services and

July 2010). The revised discussion pa-

commodities due to a high inﬂation

commodities, entertainment, and

per on Direct Taxes Code on income

rate are sucking up a major portion of

the tax rate in order to deal with the

and wealth taxes is not in the inter-

our income.

self-inflicted financial deficit.

est of most taxpayers, especially the

In my opinion, we pay taxes for

Whether the Government wishes

middle class living in metro cities.

wasteful expenditure and inefﬁcien-

to tax more or withdraw incentives

The middle-income group is already

cies of the government. The delay

for tax-saving measures, no one

contributing a lot to the government’s

and mismanagement in the prepara-

would have complaints if the basic

kitty in the form of sales tax, VAT and

tions for the Commonwealth Games

income tax exemption limit for indi-

income tax. The inﬂation rate seems

have resulted in doubling the cost of

viduals in DTC is raised to one crore

to have gone beyond the govern-

various projects. But the Delhi Gov-

rupees and abolish the wealth tax.

ment’s control, which has become a

ernment seems to have easy options

- M.Kumar

SMS: “DARE <your comments, questions or suggestions>” to 56677 Email: dare@cybermedia.co.in Website: www.dare.co.in Follow us at: http://twitter.com/daretostartup DARE.CO.IN | FEEDBACK | AUGUST 2010 17

blogs/opinion

/Vijay Anand

Considering the Exit Route Exit routes are not always detrimental to the organization, it can always be looked at as the next step towards growth

n the 80s there was a phenomenon—corporations making money were considered a bad thing. It was somehow construed that the difference in value between what the customer got and what the company incurred as cost was a siphoning off of value and that the customer was being cheated. 'Proﬁts' were simply a bad word. Then things changed. Suddenly it occured that the option of ensuring the customers the value for their money and at the same time, the stakeholders making money was a great way to incentivise this value creation process. Capitalism, as we know it, in India was born. Acquisitions or fundraising get a similar treatment these days. Everybody agrees on fundraising but the companies that have managed to raise funds are looked at the same way as companies that are considering acquisition offers—someone who has taken the easy way out. The two are innately different—one is a promise of work to be done and the other is an act of the reward of work that is done. Very much like the transition that companies went through in the perception of their proﬁt motives; it is

AUGUST 2010 | COLUMN | DARE.CO.IN

essential to understand that exits are part of the iterative process of building an exuberant startup landscape. While there are many who possess the knowledge of starting companies and people with expertise in sustaining and running them, it is those that have built companies and made an exit who contribute to the knowledge base of an ecosystem. With the IPO trend in the upswing here in India, there is a trend that seems to be emerging. More and more businesses that have been traditional businesses or ones that have built a single track business are looking out to acquire small and dynamic teams to expand their portfolio, offering and attracting a slightly larger client base. Here are ﬁve reasons you should consider for the exit offer, if you have one on the table: 1. Experience in Cycles Take a company from start to ﬁnish. The more number of times you are able to do that, the bigger you can reiterate your vision and dream towards it. There is an ancient script that says that the end is what counts than the begin-

ning—one couldn't argue with the wisdom behind it. 2. Bigger, Bolder Dream An entrepreneur who is a first generation explorer has to tread his journey with a bit of caution. Go too far into the deep end and it could be impossible to convince investors, team members or partners towards the viability of the venture and the product. The iterative succession will give one the license to bring to the table, a vision that is not mistaken for a fool's dream—having the credibility in the project and liquidity to even build the first working version with his own money or better yet, go Zoho's way and never take VC money. 3. You are Venture Fundable Your track record speaks for itself. Experience counts a lot—be it failures or exits, adds up to something and builds a credibility in the industry; something that investors can use to guage your implementation and execution skills. If you bring home enough of an exit for those involved, you

can presume that your next venture will not have fundraising issues. You can include marriage proposals as part of this, no more will your future in-laws ask if you can deliver on your promise to give a good life? 4. Reward the Team When building a venture and especially when deciding as to whether to bite an offer or to keep pushing forward to the next opportunity window, do consider your team—without them all would be nothing more than just dreams. As such it is up to you to also ensure that they could possibly cash out on the promises that were made as ESOP when they signed up. Two other things also happen as a side effect, you will have slightly lesser problems attracting an even more solid workforce for your next venture, and also startups in general will have an higher perceived value for equity payouts. That's ecosystem building at its best. 5. The Next Wave of Angels There is a funding problem in India and it will never quite get solved till people who have made money in the startup space start funding. We have plenty of them. People who have made money the hard way, one paisa at a time, will find venture investment highly risky and uncertain for their appetite, no matter how you cut it. It's also not just the money but the experience that you bring to the table. To be able to gauge the difference between the near death experience of a startup versus a straight dive to the pit that can make all the difference in giving a company a new leash or shutting it down; if not for a trained eye which has experience to back it up, it can be extremely hard

The entrepreneur is the final product and we are all evolving and just like how we build a company, focus on profitability first

to spot the difference between the two. If you have been with me so far, one has a logical question to answer. When should one sell? I'd suggest three crucial points when you can consider selling your company. 1. Sell when you are at the end of one phase of the value creation process If you are riding a hype and have an option to make an exit, none of the benefits that we talked about in terms of credibility might really confer upon you. It's very well possible that you happened to be at the right place at the right time. But if you have built a company and a product and you can prove traction and market positioning, you are definitely at the right spot—the transition so far, and the next level. It's perfect timing. 2. Sell when and only when your product and vision aligns with that of the buyer If the company is buying you out just so that they can save on hiring, training and team building costs, say no (unless you are doing a desperate sale, in which case just take it for what it's worth). With the current wave of acquisitions being out in the open with an agenda to be able to expand the product range and the market, it shouldn't be difficult to find a company that

can ﬁnd synergies with what you do, and also give you your space to grow in the market position that you have carved out for yourself. 3. Sell at the brink of the founders capability You as the founder have been a swell captain from day one and now the team has grown beyond you; and you are more tired than thrilled of running the company. You have the option of either hiring a new CEO and a management team around it or get acquired. Be rather straight forward here. There is a long list of problems that the nascent startup ecosystem in India has and I would bet you that a good number of them would get solved or would find a solution should some exits start happening and people can go beyond the empty promises given to the investors all over. The entrepreneur is the final product and we are all evolving and just like how we build a company, focus on profitability first, then aim for higher margins and then try to bring in the hockey stick growth and margin. Same applies to one's entrepreneurial lifestyle as well. Sure, the first exit is probably not going to get you enough to retire and buy an island for yourself but it most definitely counts as the first bold step. If you are one of the lucky few, it's worth considering. R

Vijay Anand is a serial entrepreneur, the founder of Proto.in, and the Vice President (Incubation) at IIT's RTBI. He tweets at @vijayanands. To write to the author, please send an email to dare@ cybermedia.co.in with the subject line 'Vijay Anand'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

DARE.CO.IN | COLUMN | AUGUST 2010 19

You drive 8% of the GDP You export 40% of Indiaâ&#x20AC;&#x2122;s goods You employ 2.6 crore people You connect India with Bharat You are the fastest innovator You are the early adapter You create markets You are the dream India dreamt 60 years ago...

..AND YOU WILL DELIVER HER DREAM OF 2020

AUGUST 2010 | PROGRAM | DARE.CO.IN

INSPIRING 50 SME Entrepreneurs Are you ready to join the Constellation of 50 who will inspire a legion of entrepreneurs who will steer Bharat to global excellence? OBJECTIVE To identify and recognize entrepreneurs in the SME ecosystem who can inspire legions of entrepreneurs in their community and thus create a virtuous circle of excellence in India's most vibrant and emerging business sector.

ELIGIBILITY • All entrepreneurs who are running a company with a turnover of Rs 10 crore to `50 crore annually • Their business entities should be registered in India as per Indian laws

SELECTION PROCESS 50 Entrepreneurs will be selected from the nominations based on VISION • Ability to have seen a gap in the market LEADERSHIP • Raising a fund and a team to deliver a differentiated product and/or service FUTURE POTENTIAL TO MOVE UP THE SECTOR • Having built a business in the range of 10-50 crore, looking at jumping to the next level

JURY The ﬁnal selection is made by a panel of eminent jurists drawn from the mid-market segment under each industry vertical

For More Information: Visit http://www.dare.co.in/inspiring50 For Sponsorship: Contact Jaideep Marlur (email: jaideepm@cybermedia.co.in) OR Mario Gabriel (email: mariog@cybermedia.co.in) DARE.CO.IN | PROGRAM | AUGUST 2010 21

PROCESS

INSPIRING 50 SME Entrepreneurs

August 2010 - September 2010 Announce the Inspiring 50 Entrepreneurs program. DARE editorial team will reach out to SME clusters across India to gather nominations for the program. October 2010 - November 2010 A panel of eminent jury members drawn from the mid-market from major industry cluster will help DARE editorial to shortlist the entrepreneurs. From the shortlist DARE Editor will finally announce the Top 50 Entrepreneurs in the SME segment in India. December 2010 - January 2011 Profile each of the Top 50 Entrepreneurs based on interviews. Act Now Please visit: http://www.dare.co.in/inspiring50 to find out how to enroll your own company or nominate another company for this program. For Sponsorship details contact: Jaideep Marlur (email: jaideepm@cybermedia.co.in) OR Mario Gabriel (email: mariog@cybermedia.co.in) 22

AUGUST 2010 | PROGRAM | DARE.CO.IN

Amazing Businesses Around Autos Hold on to your seats, because autos around the country are geared to take you for a ride of a different kind altogether. Business plans to better auto services are attracting more and more customers /Shradha Mohanty

ntrepreneurs from different parts of the country have come up with unique ideas to make this mode of public transport more accessible and customer-friendly. Customer experience and services seem to be the new buzzwords doing the rounds in several innovative auto rickshaw circles in some of the popular cities in India. After their ﬁrst taste of success, the brains behind these talk about how they chanced upon the idea, the challenges to it and roadmaps ahead.

chand Dedhia, Ishan Mehta and Simi Sailopal in Mumbai. The 24-page monthly magazine was an instant hit among the localities, providing a wide array of topics from technology, entrepreneurship to music and lifestyle. The trio came up with the idea to exploit the potential of the auto rickshaw for brand-building after conducting a survey among 200 people in the city. This showed that majority of the people preferred spending their time reading while commuting (30 percent) as opposed

to using the cellphone for texting, browsing, playing games or doing nothing at all. Placed immediately in front of the passengers' seat, in a shelf designed to catch the attention of the traveler, the magazine also gives the reader listings on the best movies and cafeterias in Bandra, Juhu and Lokhandwala. “People have responded well to sections like Below the Belt, What if in the magazine which centers around celebrities. They are spoofs to make them laugh,” says Ishan Mehta, Editor of Meter Down. It

Read up in the Rick Meter Down, India's ﬁrst auto rickshaw magazine was launched in March 2010 by entrepreneurs Mul-

The Meter Down magazine. 24

AUGUST 2010 | STRATEGY | DARE.CO.IN

Creators of Meter Down: Ishan, Simi and Mulchand.

also has a section called Your Bazaar which allows people to buy and sell products. Other categories include entrepreneurs' and celebrity interviews, quirky quotes, hilarious networking messages and relationships. Apart from Ishan and Mulchand, the magazine has a team of seven to eight writers and seven distributors. The Meter Down shelf also gives opportunities to various brands to advertise themselves. In response to whether they were sure their idea was going to be a success with an investment of `25,000, Ishan says, “When it’s a startup, you have a to-do list. There will be different things which will test your patience. You get apprehensive about everything but at the same time you work equally hard towards making it work.” The biggest challenge was to convince the auto rickshaw drivers to be a part of the venture. They were apprehensive about the idea. “Auto rickshaw drivers were used to seeing people put up their advertisements on the vehicles at night and not come back to pay them," says Ishan. We had to convince them that we are going to pay them a ﬁxed amount every month if they let us put up the Meter Down shelf and the magazine in the auto rickshaw.” Meter Down team managed to start their venture in 500 auto rickshaws plying between Bandra and Goregaon. Their primary source of income is advertisements. The auto rickshaw drivers are in turn paid every month for carrying the magazines. Meter Down prints 3000 copies every month. With regards to future plans, Meter Down team decided to play around with the magazine content. They hope to include feature articles which are light and can hold the attention of the rider over an average time period of a 20-minute ride. To make sure that the magazine is not taken by the customer, it is tied with a nylon cloth to the vehicle. Every shelf holds one magazine. The drivers are

provided with additional five copies to replace the torn and worn out ones. Since the content has bigger fonts with ample spacing, one copy suffices for three customers. When asked about losses sustained, Ishan says it hardly occurs in five to seven percent of the cases, which comes down to 30-35 auto rickshaws. Meter Down has been approached by people in Bhopal and New Delhi to expand services. For now, they say they want to expand to the central suburbs of Mumbai within the next six months and expand their customer base beyond 12 lakh. On whether they hope to launch the magazine in the local language, Ishan says, “Well, there are at least 20 colleges along the BandraGoregaon route, with students coming from management, engineering, and economics background. Almost 70 percent of the people in the area come from affluent families. So, they are pretty much well-versed in English. As of now, we have not given it much thought, but we might launch it in Hindi,” he adds.

Hello Auto Dial-an-auto services in Pune is gaining ground by helping the auto rick-

shaw drivers increase the customer base by making themselves more accessible. All the customer has to do is dial a number and make a request to where he/she has to travel an hour in advance. The same information is provided to the nearest auto rickshaw via phone. Once the driver conﬁrms, the customer receives an SMS which mentions the distance and fare chargeable along with driver and vehicle details. This venture, a brainchild of Janardhan Prasad and Mukesh Jha, IIT Kanpur graduates, helps both the auto rickshaw drivers and the customers in saving time as well as money. “We do not guarantee any kind of safety or security, but we do have a customer base which logs in all the details like license and other information and that can help,” says Janardhan. In a survey conducted, they found that most of the people complain of poor auto services because the auto rickshaw drivers charge an additional fee over the meter. Also, the drivers waste fuel in traveling around 30 kms everyday looking for customers. Dial-an-auto services becomes a meeting ground for both the parties and helps them equally. Although they do not have any tie-ups with any auto rickshaw

Founders of Dial-an-auto service Janardhan and Mukesh. DARE.CO.IN | STRATEGY | AUGUST 2010 25

Nirmal Kumar started G-auto services in Ahmedabad.

unions they were able to gather a ﬂeet of 400 vehicles by approaching them directly. “Gradually we started gaining ground as news spread by word of mouth,” says Janardhan. Dial-an-auto is still in its pilot phase and Janardhan says the biggest challenge initially was to get auto rickshaws under their wing and acquire customers in the process as well. “We want to keep auto rickshaws mobile by trying alternative channels,” says Mukesh. “In the coming quarter we hope to do a valuation of this pilot project, and decide the terms and agreements of our venture.” Currently, they operate from home and are operational from nine in the morning to nine in the evening. In the future, Dial-an-auto hopes to expand to other cities as tie-ups with some partners. They also hope to expand their ﬂeet by a hundred every month. With regards to implementation of new technology in the rickshaws, Janardhan says, “We do not have any plans of installing GPS services, but we hope to come up with some kind of cell phone technology, the cost of which would come to less than 5000 per vehicle.” For now, they have 400 auto rickshaws under their wing.

G for Going Good In another part of the country, in Ahmedabad, a young entrepreneur decided to bring about a 360-degree change in the way autos are being run. Along with providing services like Dial-an-auto, it also provides free newspapers and magazines, 26

AUGUST 2010 | STRATEGY | DARE.CO.IN

A G-auto plying on the road.

calling facility, mobile charging points, trash bins to its customers. Nirmal Kumar, an IIM Alumnus came up with the concept of G Autos (G for Gujarat) to change the way auto rickshaws function in the city. “They do not behave properly with customers, I came across such an experience. They charge extra over the meter. That is why customers have also become wary and suspicious about them,” says Nirmal Kumar, CEO of Nirmal Group which owns G Auto. G Auto services claim to be safe and reliable as the customer can contact the call centers any time with the information about the driver. Now the auto rickshaw drivers, also known as G pilots, who are a part of auto rickshaw services initiated by Kumar are being trained to be proﬁcient in Hindi and English so as to make them more hospitable and customer-friendly. G Autos have already

When it’s a startup, you have a to-do list. There will be different things which will test your patience. You get apprehensive about everything but at the same time you work equally hard towards making it work

started their courier service and pick and drop facilities for school children as well. After its success in Ahmedabad, G Auto plans to expand to Vadodara with 250 rickshaws. On 15th August, it will expand to Surat and Rajkot as well with 250 rickshaws each. “We don't want tie-ups with anybody. Then the whole thing becomes very commercialized. The social concern of the venture is lost. We have already received proposals from many cities.” Initially, the auto rickshaw drivers were reluctant to be a part of G Auto, but as more and more of them joined the group, others followed. They get beneﬁts like an accident insurance and support for their children's education as well. “We never really had a major problem with starting up the business. We got tremendous support from the Government. They are opening a new ofﬁce for us in Vadodara. It was just a matter of convincing the customers that they will not be cheated anymore.” As of now there are over 1500 registered auto rickshaws in the city. Regarded even today as one of the most important modes of intra-city transport in the country, these out-ofthe-box ideas not only help the auto rickshaw drivers retain their customer base, but also generate interest and induce a sense of novelty to the threewheeled wonder. Such schemes may give way to newer ideas and services in the near future by way of which auto services can better themselves throughout the country. R

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SMEs Gear Up For Growth The Small and Medium Enterprises want banks to do more by giving faster access to growth capital even as they are keen to embrace technology for good returns

he Small and Medium Enterprises want banks to do more by giving faster access to growth capital even as they are keen to embrace technology for good returns These are hectic times for small and medium enterprises in India. Recovering fast from the economic slowdown, they are busy chalking out strategies that would help them take a quantum leap into the future bringing them new orders, new markets and more revenue. Despite support from the government, there are several pain points that the SMEs have to deal with. Besides the challenges relating to hiring talent and drawing effective marketing strategies, it is the pain of raising growth capital and deploying technology that keeps SMEs occupied most of time. This leaves little time for them to focus on core business activities. Keeping these issues in mind, DARE in association with ICICI Bank and Cisco, organized the SME Knowledge Forums in Delhi, Kolkata and Nagpur. These events were part of a series of events that were organized in several other cities and were targeted at speciﬁc industry clusters. In Delhi, the Knowledge Forum was targeted at Infrastructure sector with a host of issues relating to SME ﬁnance were discussed by the panel, which constituted Ved Khurana, State Coordinator, Builders Association of India (BAI); Rajiv Panthary, Assistant General Manager & Zonal Sales Head – SME North SMEAG, ICICI Bank; and Anurag Krishna, Territory Market Magager –North SMB, Cisco. 28

AUGUST 2010 | EVENT REPORT | DARE.CO.IN

Vimarsh Bajpai, Sr Assistant Editor, DARE, moderated the panel discussion. Khurana pointed out as to how the banks should take a more pro-active approach while lending to SMEs. He cited examples of how sometimes it becomes difﬁcult to convince the bank about their repayment capacity. The discussion saw participation from the member of the audience who cited that while banks did help in some cases, many a times, the sanctioning of loans gets delayed and eventually the purpose of raising growth capital gets defeated. Panthary of ICICI Bank said that banks need to asses the risk involved before deciding to lend as they are answerable to their shareholders and cannot blindly grant

Audience at the SME Knowledge Forum.

loans without properly assessing the credit history of the borrowers. On the technology front, Khurana said that SMEs must adopt technology and see it as an enabler but the recurring costs of deployment of networking solutions was what holding them back from spending more on technology. To this, Krishna said that many SMEs feel the pinch of technology because they still see it as cost and not as a vehicle for growth. He said the availability of trained manpower was not the issue anymore, all that SMEs need is to understand the big boon that technology is to them. In Kolkata, the engineering companies that gathered for the event was a mix of small and mid-size en-

Delhi: (L-R): Anurag Krishna, Territory Market Manager - North SMB, Cisco; Ved Khurana, State Coordinator, Builders Association of India; Rajiv Panthary, Zonal Sales Head – SME North SMEAG, ICICI Bank

Kolkata: (L-R) Manoj Kumar Tiwari, Territory Market Manager, Cisco; Subhrajit Mitra, Zonal Head (East), SME and Corporate Agri Group, ICICI Bank; Satrajit Banerjee, Assistant Director, Engineering Export Promotion Council; Neeraj Mishra, Director, Bharat Bhari Undyog Nigam Limited

Nagpur: (L-R) Abhay Garde, Maharashtra State Chairman, Builders Association of India; Praveen Trivedi, Zonal Head West for SME-AG Group, ICICI Bank; Pravin Tapadia, President, Vidarbha Industries Association

terprises that are looking to expand over the years. The enthusiasm at the event was evident from volley of questions that were asked from the panelists. The panel here included Neeraj Mishra, Director, Bharat Bhari Udyog Nigam Limited; Satrajit Banerjee, Assistant Director, Engineering Exports Promotion Council (EEPC); Subhrajit Mitra, Assistant General Manager and Zonal Head (East), SME and Corporate Agri Group ICICI Bank; and Manoj Kumar Tiwari, Territory Marketing Manager, Cisco. Many of SMEs here are keen to target newer markets of South America and expressed the willingness to jump on to the EEPC bandwagon. On ﬁnance, they expressed concern regarding the interest rates that they claimed were higher that those charged from large enterprises. On technology, many of the engineering units are making fresh provisions in their budgets to include spends on networking solutions. At the SME Knowledge Forum in Nagpur, it was a mix of companies from sectors such as infrastructure, manufacturing and power. Those on the panel included Pravin Tapadia, President, Vidarbha Industries Association (VIA), Abhay Garde, Maharashtra State Chairman of Builders Association of India; and Pravin Trivedi, Zonal Head West for SME-AG Group of ICICI Bank. The discussion led to Tapadia seeking more action from the banks in lending to SMEs. He sought greater cooperation from banks in easing the norms for lending. Trivedi said the banks were sensitive to the needs of the SMEs but insisted that transparency on part of the SMEs was an absolute must for banks to have enough conﬁdence in lending. Garde cited that the construction sector was being meted out a step-motherly treatment by banks and that they needed to develop a better relationship with SMEs to understand their pain areas. R

DARE.CO.IN | EVENT REPORT | AUGUST 2010 29

entrepreneur of the month With plans to take the Indian cheese and curds market head on, the company has touched a turnover of `550 crore in the ﬁnancial year 2009-2010. Shah is the entrepreneur behind Parag Milk Foods, which deals in only 100 % cow's milk and milk products, and owns the 'Gowardhan' and 'Go' brand of dairy products. Shah talks to DARE about his entrepreneurial journey

enesis of Parag Milk Foods It has been four generations since our family has been in some business which is around farming. When I ventured out to do something of my own, the dairy milk was slowly gaining traction. In 1989-91, around the time of Operation Flood, there was huge deluge of milk produce in Maharashtra, as was the case all over India. We made the best of “milk holidays” to build a global dairy products business. While there were government organizations and cooperatives in place, there was large number of farmers with cows whose produce was not getting sold, which lead to wastage of their produce. This is when I saw an opportunity in getting into this field. My father, Prakash Shah, had set up a cold storage like facility way back in 1972, providing services to the potato farmers. It is since back then that we had a mutually trusting and benefiting relationship going on with the farmer community. I started my business in the dairy industry with 30,000 liters and currently have the numbers at 10-12 lakh liters. Over the period, we have diversified into products such as

AUGUST 2010 | BIO | DARE.CO.IN

ghee, cheese, and more. We have our dairy plant and cow farm in Manchar (near Pune) which is spread over 35 acres; housing around 3000 cows and equipped with one of India’s ﬁrst Rotary Parlors, which has mechanized the whole milking process and in turn ensured high quality and hygiene. We currently manage one of India’s largest cattle farm and Asia’s largest cheese plant. Our recently commissioned cheese plant has the capacity to produce 40 tons of cheddar, mozzarella and processed cheese per day.

because there are no local players focusing on this market. I saw an opportunity that is lying untapped here and hence ventured out with an array of cheese based products. Our company has recently launched a very high end cheese under the brand name of GO in variety of forms like Processed Cheese, Cheese slices, Cheese Spread Plain, Pizza Cheese & Cheese powder. Internationally, there are about 350 varieties of cheese. We are determined to bring in as many varieties as possible under our brand Go.

What is the idea behind your recent foray into the cheese business? If you look at the growth patterns – liquid milk grows at 5-7 percent, butter is between +/- 5 percent, while cheese outruns all these in terms of growth at around 40-45 percent. We have a booming market of food chains such as pizza outlets (Dominoes, Pizza Hut, and others), restaurants like Ruby Tuesday, and many other food joints that serve Italian food. All these places need a constant and heavy supply of cheese. Mostly, this requirement is fulﬁlled by importing cheese from other countries,

How do you deal with your competition? The companies such as Amul and Britannia are not really our competitors to begin with. Yes, there is some level of competition, but that is in a very limited space. We have carved a niche in the dairy busi-

Devendra Shah Parag Milk Foods

DARE.CO.IN | BIO | AUGUST 2010 31

Never should any entrepreneur think of compromising on quality to sustain the low; it is very important to maintain it, for the entrepreneur to rise again

ness, but bringing out milk based products which are not produced by either of these players. Instead, we see competition in international brands such as Kraft and Laughing Cow, who are still to come with their products into India. I am sure that by the time they start their activities in India, we would have perfect packaging and distribution in place. Also we believe that the quality and pricing that we are providing to the Indian customers will go a long way in retaining and growing our market share in the future. Off shoot business opportunities in your industry? There are many. India is developing very fast, and the people in India have started living a better life and have started eating better food. Think about it. From morning to evening, you have milk based products such as milk with breakfast; curd, paneer, butter milk, lassi with lunch; cheese in sandwich or burgers that one has for snacks; and again in the night milk and other milk based products are consumed. If one calculates roughly, all this will account to 30-35 percent of your daily grocery needs. What is the top challenge in doing business in this industry? In this industry, the way we procure the raw material is unlike most other industries. It is a very capital intensive affair to get things going. On top of all this, it is important to keep in mind the development and welfare of the farmers you are working with. The challenge is to maintain a balance between being a for-proďŹ t business and being a company which does not neglect the welfare of the farmers it works with. What was your ďŹ rst big taste of success as an entrepreneur? This business was not open for private players and was ruled by the license raj which gave the milk pro-

AUGUST 2010 | BIO | DARE.CO.IN

curement right only to state agencies and cooperatives. In 1991, the then Finance Minister Manmohan Singh announced de-licensing policy which included the dairy sector. This is not really a self made success that I tasted, but this is a milestone after which in 1992 we were able to set up Parag Milk Foods. And when I started this business, the sheer amount of support that farmers showed in me, is what I call as my first big taste of success. Like I mentioned before, it is on day one of my business that I had 20,000-30,000 liters of milk procured. Also, as a youngster watching India win the Cricket World Cup in 1985, I had decided that I need to become a champion of champions like Ravi Shastri and own the car (Audi) that he won out there. When my business took off and I was able to buy the Audi, I knew I was tasting success. Any mistake you learnt a lot from? In 1997, there was a very fast paced growth happening in the industry. The farmers had government agencies, cooperatives, and private players to sell their milk to. This got them increasing their production, and this in turn pressurized me to keep procuring this increased yield. In some time I had a sense of all this getting a bit too saturated for my comfort. I wanted to get into by products, and here I was with loads of milk. Eventually, all this led to us withdrawing our business of liquid milk pouches from the market. The one mistake that any aspiring entrepreneur should avoidâ&#x20AC;Ś I would say, any entrepreneur should never compromise on quality of their products and/or services. There are ups and downs that keep happening in any business. Never should any entrepreneur think of compromising on quality to sustain the low; it is very important to maintain it, for the entrepreneur to rise again. R

from the Blogs http://www.dare.co.in/blogs.htm

United Airlines teaches efﬁciency Posted by: Prashanth Hebbar in in the news on Jun 26, 2010, Tagged in: operations, aviation

he best way to derive operational efficiencies can be learnt from the aviation industry. Recently, United Airlines flew an airliner from Chicago to Frankfurt and ended up saving 1,400 gallons of aviation fuel (that’s approximately 5,600 litres). See what the wired story says: The flight, made earlier this

month, and was a regularly scheduled trip but United and its partners, including air traffic controllers in the United States, Canada and Europe, had been planning it for some time. Several fuel-saving techniques were used, but the main goal was demonstrating how a flexible flight path allows pilots to take advantage of favorable winds,

says Joe Burns, director of flight tests at United. Most often we can identify patterns in our operations which if freed up can result in efﬁciency. Any attempt to take up such efﬁciency drive requires careful planning and a team drawn from all entities, in the immediate ecosystem, working towards a common goal.

Faster traffic updates (on FM) Posted by: Nimesh Sharma in in the news on Jul 12, 2010, Tagged in: traffic jam, traffic, telecommuting, rains, bad roads

“R

adio DARE presents Bu m p e r- t o - Bu m p e r traffic updates, brought to you by Hero Cycles, Bata Shoes, Apple iPhone and Twitter Phone. Here is an update on traffic for this hour. Near Moolchand Flyover, traffic has started moving at speed of 10km/ hr, faster by 5km/hr. In Connaught Place, traffic movement has increased by 2km/hour and is expected to increase by 3km/hr in the next one hour. For Okhla, our reporter standing on a nearby building with a mobile radar will soon give updates on the traffic speed.” With the vehicles in Delhi (and other metros) teeming by thousands daily, civic infrastructure improving uphill at snail’s pace, unrestricted immigration to urban areas, cheaper cars like Nano and others being made for the lower middle class; doesn’t this traffic update, giving minimal increase in traffic speeds, wholly sponsored by some companies, look real-

istic in the near future? I was forced to think of this when few days back, I went back home from Gurgaon to north Delhi (40 km) in three hours by ofﬁce bus, extra time sponsored by rains, few bad roads and jams. Would we not have trafﬁc updates like these in future? Take another example:

An imaginary conversation between two colleagues: A: So, when did you leave home today? B: Oh! Today I left at 6:30 in morning, managed a constant speed of 14km/hr and came to ofﬁce in three hours ﬂat. A: Man! I dont believe you. I have not been able to do that in the last 20 days. Thats just too fast. B: Well Yeah! It was kinda miracle. Otherwise, even I couldn’t have driven at more than 12. Cars are no more status symbol, but a ‘bad-road-status’ symbol. (Read my coming blog on this topic) Well! Today this blog may seem like a farce with situations too extrapolated. However, the cause of the situation highlighted here is not too distant in the future. Are we all prepared for that? Do we have options? What are the options with us? On whom does the onus fall for exercising the options and preventing such a situation...? DARE.CO.IN | FROM THE BLOGS | AUGUST 2010 33

from the Blogs http://www.dare.co.in/blogs.htm

Packing it good! Posted by: Shradha Mohanty in in the news on Jul 13, 2010, Tagged in: Untagged

‘D

on’t judge a book by it’s cover’. Yes? Okay. But, I just can’t help it when it comes to chocolates. I was addicted to purchasing Toblerone in school because it would come in this unique prismaticshaped box and I absolutely disliked Cadbury’s Dairy Milk because it always looked so boring with its golden and violet cover. A pack of Reese’ peanut butter chocolates in bright orange covers, a cylinder of Almond Roca layered with golden foil, or even Cadbury’s large and glittery Diwali special box full of Dairy Milk inside! I’d buy anything that looked tasty. Right packaging and design to the chocolates is what helps a brand promote itself successfully, giving it the

competitive edge. Here’s a little bit of information on what the packaging material is made of: HDPE: High-density polyethylene. The same is also used for making things like milk jugs, plastic bags, re-

ﬁllable bottles, etc. Aluminum foil is also used for primary packing. Thin cardboard is used for secondary packing where information like brand logo, ingredients and other information is mentioned. Tertiary packing, if any, includes corrugated thick cardboard. To read up more on the process of packaging: http://www.techno-preneur.net/information-desk/sciencetech-magazine/2009/may09/Opportunities-Galore.pdf From Indonesia to the Ivory Coast, Bolivia to Brazil, here are 20 of the most beautiful chocolate packaging designs from around the world: http://www. thecoolist.com/chocolate-gifts-20of-the-worlds-most-beautiful-chocolate-package-designs/.

Wires stink as Prince says Internet’s history but wait... Posted by: Prashanth Hebbar in in the news on Jul 06, 2010, Tagged in: piracy, Online, DRM

ell, that’s what a slew of blogs are making it out to be. In an interview to Mirror, Rock legend Prince said: “ The Internet’s completely over. I don’t see why I should give my new music to iTunes or anyone else. They won’t pay me an advance for it and then they get angry when they can’t get it.” This has drawn the ire of some of the commentators in the blogosphere. However, I wouldn’t jump to conclusion so quickly before reading him in context. 34

AUGUST 2010 | FROM THE BLOGS | DARE.CO.IN

What Prince has said is a wake-up call to the way Internet business happens these days. At one end, RIAA is busy ﬁghting online piracy and the case of Hurt Locker seems to be setting a trend of its own. Then there are complex laws proposed such as the “Three Strikes Anti-Piracy Law.” IT and entertainment companies are touting a number of DRM schemes, none of which have been practical. Amidst all this, iTunes seems to have struck a chord. So what Prince is saying is more about Internet being a distribution

medium. There is a grain of truth in what the rock legend says. Internet is caught in a Catch-22 situation. If artists and studios demand that stringer laws be brought in to deal with anti-piracy then it becomes so difﬁcult and complex to enforce it on the ground. In the absence of such laws, artists and studios may still make it difﬁcult to get their work online legally. We cannot wish away this problem. It is real and now. So how do we deal with it? Thanks Prince for bringing it up.

from the Blogs http://www.dare.co.in/blogs.htm

Will the helmet industry bloom now? Posted by: Nimesh Sharma in in the news on Jul 08, 2010, Tagged in: SIAM, helmet, Delhi, two-wheeler

ust read today in newspaper that now two-wheeler manufacturers will have to supply helmets necessarily with each scooter or bike they sell. The decision by SC is very much valid and ought to have been implemented much before the innumerable accidents reported. Now this will make sure that the helmet market gets organized in Delhi at least. The helmet manufacturers and sellers were till now depending on the mercy of the voluntary purchases by two-wheeler drivers and that of the traffic policemen occasionally trying to implement the rules, who sometimes waived them for some warm grease on the palm. It opens up the scope for many a helmet makers to tie up with two-wheeler manufacturers to manufacture BIS conformed helmets for them. If we see this in a bigger picture, this opens up another ancillary industry, which will be officially attached to the main industry. Till now it was just dragging on as an unorganised market. Does it mean an end to the daily wages of the roadside helmet vendors in Delhi, though a minority? There were arguments that if a person is buying a second vehicle, s(he)’ll have to buy a helmet compulsorily, but that has been rejected (I guess). So, if no one is going to buy a helmet from the roadsides, these vendors are sure to die an untimely death. How they can be absorbed in the main industry that will bloom, is a good question to find solution for? Do you have any solutions? R

AUGUST 2010 | FROM THE BLOGS | DARE.CO.IN

blogs/opinion

The “Contented Entrepreneur” /Anurag Batra

Contented entrepreneurs are not hard to ﬁnd but isn't it defeating the sole purpose of entrepreneurship? Whoever said 'Be not afraid of going slowly, be afraid of standing still'

picurus, the famous Greek Philosopher once said, “Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.” As a first generation entrepreneur I even relate to it. The Greek might have to again return to philosophy as their nation goes through economic turbulences. Isn’t a contented entrepreneur, an oxymoron? If an entrepreneur is contented, isn’t it the end of road for him or her? Should an entrepreneur be contented and satisfied what he or she has achieved? Shouldn’t he be hungry for more always? So have I gone senile? Why am I talking of this notion of a contented entrepreneur? Can I give examples from India and the world of contented entrepreneurs? Can I describe and profile one such entrepreneur? Am I referring to a second generation satisfied entrepreneur? This came to my mind last Saturday as I was in Mumbai, having breakfast with a friend who had just come back from an overseas trip where he met his friends who had gone for an executive education. They had enrolled for the Owner/President Management Program at Harvard. During our discussions it came up as I was asking about the profile of people attending and his coursemates.

My friend replied in Punjabi “Rajje hua bande aande hain.” Contented and wealthy entrepreneurs come. He went on to share how these accomplished entrepreneurs are at peace with what they have got and are enjoying and enriching life and in some way giving back to themselves and society. That’s what got me thinking of the notion of a contented entrepreneur. The Harvard website describes this program as someone that helps an entrepreneur. “As an owner and entrepreneur, your relationship to your business is very different from that of other executive leaders. Managing equity stakes, transition planning, and strategic and professional growth all require special consideration on your part. Owner/ President Management (OPM) is an unparalleled opportunity to step back from your daily challenges and acquire the skills, insights, and vision you need to sustain a proﬁtable enterprise in the new economy.” My theory is contented entrepreneurs invest in the future. Even the OPM at Harvard says “This unique leadership development experience encourages both business and personal renewal supported by fresh insights, new tools, and proven techniques. By becoming a better business leader, you will generate ongoing returns for your company.” The contented entrepreneur is looking at fulﬁllment, looking at giving back, is a genuine philanthropist.

The contented entrepreneur is looking at enjoying the ride and helping someone on the way and not just reaching a destination. The contented entrepreneur is looking at widening his or her horizon. He/ she is looking at newer and newer manifestions of growth of spiritual enrichment and intellectual enhancement. Warren Buffet and Bill Gates could well classify as contented entrepreneurs. Warren Buffet once said “Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.” The point is money is fine; enterprise value is fine; but once you achieve that, you are looking at another milestone that will challenge you to the fullest. In India also, there are many entrepreneurs who give a lot to various causes and get their contentment with material achievements showing the way. Dare I remind an entrepreneur that “Contentment is natural wealth, luxury is artificial poverty?” R Anurag Batra is real life, first-generation entrepreneur who is Much Below Average (MBA) from the prestigious Management Development Institute, MDI. When he is not busy writing such columns, he can be reached at anuragbatrayo@gmail.com. Anurag is the founder and editor-in-chief of exchange4media group which includes exchange4media.com. To write to the author, please send an email to dare@ cybermedia.co.in with the subject line 'Anurag Batra'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | AUGUST 2010 37

Business of Flags: Bringing In The Money The sale of the Indian ďŹ&#x201A;ag is all set to rise by 20 percent this year. More and more people are buying to indulge in the festivities of the occasion /Shradha Mohanty

AUGUST 2010 | SOCIETY | DARE.CO.IN

ome August and a patriotic pride grips the nation. It's one colorful celebration where young and old take part with equal zeal. And the tricolor becomes omnipresent. Flags waving on top of buildings, school kids purchasing plastic flags from local hawkers, teenagers sporting handkerchief-sized version of the same on their sleeves, everybody indulges in to celebrate the occasion. More flags mean more business for the flag makers. With the government ruling in 2002, which allows flags to be put in schools, corporate offices and other private spaces along with

government buildings, the sale of the Indian flag has gone up by 20 percent, says Karnataka Khadi Gramdoyog Samyuktha Sangha (KKGSS) secretary, S V Somanati. The KKGSS which is located in Hubli, manufactures and sells the flags for various institutions across the country. “Last year, sales were recorded to be 61 lakh, this year we are predicting it will go up to 75 lakhs,” says Somanati. They have already confirmed orders for 20 lakh flags and more orders are coming in everyday. The KKGSS supplies flags in nine different sizes, the smallest being four inches

by six inches and the largest spanning across 14 feet by 21 feet. Another private manufacturer from Mumbai, Dalvir Singh of The Flag Company, who is the official supplier of flags for the Common Wealth Games says they have recorded sales of a 1000 pieces everyday. In total they have already manufactured 1,00,000 flags for the occasion of Independence day. Khadi Bhandars in Bangalore are ready for some brisk business in the coming week. “It's a seasonal market. Sales are high during Independence Day and the Republic Day. Even though flags do sell on other occasions like Gandhi Jayanthi, it doesn't count much,” says Purushottam, a dealer at a Khadi Bhandar store. He adds that every year at least 20 orders for flags sized 8 feet by 12 feet comes from the Vidhana Soudha (in Bangalore) to his shop. Schools and colleges across the city usually order for flags sized four feet by six feet. “The sales are going to be more or less the same. But it has never dipped.” Depending on the location, Khadi Bhandars in the city sell around 200– 400 flags every year. The prices range from `100 to `2800. However, few dealers are of the opinion that the sales will not go up over the years. “Out of an entire year, the flag business hardly goes on for a period of three months. Also, the flags made of khadi are durable and hence can be reused. There are also other factors like the weather, if it is bad during those days, sales are likely to dip,” says another dealer who gets his supply from Pune. Some also say they expect the sales to go up to 500–600 flags. The manufacturers also raise a concern on how the flag is not respected properly. “Immediately after the occasion, you will see hundreds of them lying on the roads,” says Singh. “Distribution of plastic flags should be stopped as soon as possible. It is against the rules laid down by the Bureau of Indian Standards,” adds Somanati. R DARE.CO.IN | SOCIETY | AUGUST 2010 39

Your Questions... Your Banker Answers! Based on interactions with multiple bankers and banking consultants, we bring to you direct answers to your queries on business loans /Nimesh Sharma

our queries are easily answered by experts in the banking sector...read on to ﬁnd some simple solutions:

Preparing for a business loan 1. What are the typical stages at which enterprises would want to raise business loans? Different stages include business planning, inceiving, expansion, and forward integration in greenﬁeld projects and others. 2. At what stage will an enterprise likely to be considered by banks for a loan? After the company has been formed, all formalities have been done with and all registrations and agreements are in place. Greenﬁeld projects are funded only by PSU banks. 3. How do banks evaluate an enterprise for sanctioning a loan and what determines the loan amount: is it the balance sheet, the order book, collateral, or prospect of future business , or something else? In case of a startup, balance sheet is not there so normally business model, demandsupply and competitors’ status, tie40

JULY 2010 | FUNDING | DARE.CO.IN

ups and orders, team background, sustainability, break even horizon, product profile, quality controls, financial position and projections (Tangible Net Worth, gearing ratio, other ratios), technical-managerial expertise, execution risk (Operational hurdles — like NOCs and approvals for land, building, power, and pollution, etc.), and Sensitivity Analysis are looked upon to determine the loan amount. Often, collateral asked is much more than 100 percent of the loan which may even include property, personal and corporate guarantee. 4. What are the types of loans an entrepreneur can raise? How do they differ? Please see the banking products and services' infograph/story in DARE July issue. A loan is given for maximum five years in general circumstances. For a new plant of an existing company, the moratorium period is three months. For an altogether new company, moratorium period is one year or when cash inflows occur, whichever is earlier. 5. Can an entrepreneur pledge all his future bills to a bank? For pledging future bills, there should be a certainty of receivables in the near future, e.g., based on contract. For example, an educational institute knows that it will receive fees for the next one year. So, after deducting TDS, tax, salaries, etc, bills are pledged and loan is given. Alternatively, all these expenses are made from the loan itself. All banks have such products but many of them don't reveal it deliberately.

Due-diligence 6. What risks will the bank take to sanction a loan? Risk of bad debts affecting balance sheet of the bank, increased NPA, recovery record going bad, and bad debts need to be written off in account books.

7. What risks does an entrepreneur take while availing a loan? Risk of bad performance, non-repayment of interest and principle which affects the creditworthiness, survival risk and risk of repossession of assets under Securitization Act (as banks can sell property in three or four months now compared to years, earlier). 8. What common mistakes an entrepreneur needs to avoid while applying for a loan? Avoid the common mistakes of a business plan: • The business should not be at the infancy stage, but at the execution stage. • Own funds should be available with the proprietor, at least to the tune of 25 percent. • Company should be formed and all registrations should be in place. • Raw material and order book should all be in place. • The person should have some standing in the industry. • Don’t agree to terms you cannot comply with. 9. How should an entrepreneur prepare his project report for a business loan? For preparing project reports, help should be taken from lending institutions, CAs, technical and ﬁnancial consultants. They should be asked for formats of project reports. It should automatically include past track record, sales projections, future performance, working capital ratios, PAT, PBT, etc., so that if your loan is rejected, you at least know the exact reasons and can argue over them. It should also have the vision/mission. 10. How to stay ahead of payments? Financial discipline is necessary. Do not overspend. Do proper cash ﬂow planning. Don't take more loan than required and do not take a loan before repaying the old loan. Instruct the bank to maintain

Maintaining a trust and retention account is a good practice for SMEs to ensure repayments are done on time, and funds are there for repayment" says Sanjay Pathak, AVP, Corporate Banking Operations, Axis Bank.

a Trust and Retention Account for you (To know what it is, contact your bank now!).

Credit Guarantee and Repayment 11. Is there a credit guarantor? How can an entrepreneur get a credit guarantee? At what price? Yes, the Credit Guarantee Fund Trust For Micro And Small Enterprises (CGTMSE) is the credit guarantor. It has 110 Member Lending Institutes (MLIs), including most of the banks, who coordinate with it to get guarantee for the loan requests. There is the Export redit Guarantee Corporation (ECGC) for exports. See the infograph on credit guarantee rates for prices in the July issue. 12. What are the best practices for an entrepreneur to meet his repayments schedule without fail? Prompt repayment. Banks can restructure loans. 13. How does an entrepreneur be prepared for contingencies like delayed payments due to his delayed collections? Don't hide from or avoid bankers. Keep reserve funds. Face bankers, suppliers, and customers directly. 14. How does an entrepreneur increase his creditworthiness? • Have prompt and timely servicing of interest and repayment of principal. DARE.CO.IN | FUNDING | AUGUST 2010 41

CIBIL website has all the credit history of anyone who has ever taken a personal or business loan in India, from organised market. Besides, there are independent inquiries from suppliers, customers, debtors, creditors and industry and personal references before granting any loan. • Meet or rather exceed the projections made by you. • Do not underachieve the targets. • Give timely information to banks. Keep them updated. • Get external credit rating from agencies like ICRA, CRISIL, CARE, Fitch etc. • Give/submit all statements and documents to bank on time. • Route substantial business through the Cash Credit (CC) account of the loan-giving bank.

Default scenario 15. In case of a default, what options are available to an entrepreneur? • Apply for restructuring of loan so that the interest rate is reduced. • Moratorium period can be increased by the banks. • Apply for loan amount increment in case of delay and delinquency. • Ask the bank to decrease the EMI amount. • Ask for FITL (Funded Interest Term Loan): The interest is bundled into separate loan which runs like a normal loan. • Last option is OTS (One-Time Settlement). It affects the creditworthiness, so is not advisable. • Factually, these are all options 42

AUGUST 2010 | FUNDING | DARE.CO.IN

before default occurs (within 90 days). After that it becomes NPA and nothing can be done then. 16. Can an entrepreneur reschedule payments? For how long and by what amount can he bring down the premium paid every month? Payments can be rescheduled and banks do cooperate on this since they have to minimize their NPAs in any case. Basically, the options on default are decided on case-tocase basis. However, RBI norms don't allow rescheduling as it's included in NPAs.

Bank performance and government support 17. How much did the banks disburse to the SME sector last year? See the infograph DARE July 2010 issue, page no. 38. 18. How do banks ensure against NPAs? What checks and balances does it follow post-sanctioning? They regularly call for stock statement, liquidation of securities, quarterly review report, balance sheet every year, and internal and external ratings. Other banks’ statements and certificates from CAs on diversion and confirmation of funds are called for and normal KYC (Know Your Customer) norms are followed. The bank’s top officials even inspect the unit for functioning. They take the right measures if a company goes sick. 19. How do banks collect information about an enterprise prior to sanctioning? How does it monitor the health of the enterprise after sanctioning the loan? CIBIL (Credit Information Bureau [India] Ltd.) website has all the credit history of anyone who has ever taken a personal or business loan in India, from the organised market. Moreover, there is an independent inquiry from suppliers, customers, debtors, creditors and industry and personal references.

20. Is there a special drive for women entrepreneurs? Why should women go for it and not the regular route? Only some banks like OBC have schemes for SHGs (Self Help Groups) and MFIs (Micro Financial Institutions) offering low interest rates and low limits but only for smaller amounts. For higher amounts, they follow the normal procedure. Other banks treat all the loan requests as normal loan requests and process them normally. 21. What support do banks get from the government in disbursing more loans to the SME sector? The credit guarantee is given by CGTMSE and ECGC, and then 40 percent portion of the banks’ funds that is meant for priority lending gets some relief, like less CRR and CAR. 22. What are the chances of an entrepreneur landing a loan in a rural area as compared to the urban areas? Banks are opening new branches and even exclusive SME branches in rural areas. So, a chance of landing a loan there is gradually approaching upwards. 23. What focus do banks have for rural areas? Banks are now opening more branches in rural areas — offering mobile ATMs, KCC (Kisan Credit Card), special schemes, and even SME branches. 24. Which route is better for availing the loan? Direct from banks or through a consultant? Although dealing with the banking consultants directly, helps you in personal interaction with the bank and surely gets you some favorable terms along with low interest rates in some cases, often by manipulating your balance sheet. However, in some cases, the consultant may actually increase the total interest charge on your loan. R

blogs/opinion

India luckily hastened slowly /Paranjoy Guha Thakurta

Not listening to the so-called market-friendly advice has held Indian economy in good stead, helping it buck the ravages of the recession

hould Greece matter to the residents of Gurgaon? The answer: yes. Whether we like it or not, the world has become inexorably interconnected. What happens in one corner of the globe could have unexpected consequences for those very far away. The financial systems of the 190-plus nation-states on the planet have become more integrated than ever before and this is an important reason why talk about the proverbial green shoots of survey has become muted over the last few months. Even before the heads of government of twenty countries met at Toronto, Canada, to discuss the “fragile” and “uneven” recovery that has taken place since the Great Recession of 2008-09 – the worst the world has seen since the late-1930s – it was evident that many developed countries in Europe would not revert to a business-as-usual scenario for some years now, that progress would be excruciatingly slow. Most agencies of the United Nations agree that even after the financial sector revives, new employment opportunities would not be created in a hurry. After combined total international exports and imports dipped by a proportion close to 15 percent in 2009 for the first time in more than seven decades and investment flows shrunk by almost a quarter, there is a growing realization that trade and investments would grow only gradually during the current calendar year. Far from a ‘V’ shaped re-

covery path, political leaders and economic analysts alike apprehend a ‘W’ or double-dip recovery, while the more pessimistic among even talk about future trajectories of economic growth resembling the acronym of the internet or the world-wide web. We, in India, can consider ourselves fortunate that the gung-ho liberalizers in the government were often overruled by saner elements in the bureaucracy who cautioned the political leadership against speeding headlong along the road to financial integration with the rest of the world. Unlike banks and financial institutions in Europe and the United States, the performance of Indian banks actually improved during the crisis period when measured against yardsticks of prudence. One particular technocrat, an officer of the Indian Administrative Service, who acquitted himself with considerable élan during that period was the former Governor of the country’s central bank and apex monetary authority, the Reserve Bank of India, Dr Yaga Venugopal Reddy who completed his term just a fortnight before Wall Street melted down in the middle of September 2008. It is, therefore, important to listen carefully to his words of wisdom, which ran contrary to the conventional “wisdom” that emanated out of North Block those days. Speaking at a discussion organized by the Indian Council for Research on International Economic Relations, he

remarked that while this country had in no way contributed to global financial imbalances, it has a huge stake in the process of unwinding of these imbalances and its impact on exchange rates. Significantly, he added that the most important lesson of the global financial crisis was that free capital account convertibility and free mobility of capital did not contribute to economic stability but were potentially destabilizing elements. Dr Reddy pointed out that since financial markets did not treat all countries equally, there was a need for developing economies like India to seek “self-insurance” and that the world was today willing to appreciate India’s economic experience in this regard. He was hopeful that India’s growth story would be relatively unaffected by the ongoing sovereign debt crisis in a number of Eurozone countries, notably Greece. The short point: India was saved from the worst ravages of the international financial tsunami because it chose to cautiously court globalization, despite advice to the contrary by so-called market-friendly bureaucrats and politicians, not to mention corporate captains close to them. R The writer is an independent educator and a journalist with over 33 years of experience in various media – print, radio, television, the internet and documentary cinema. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Paranjoy Guha Thakurta'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | AUGUST 2010 43

CGTMSE Celebrates 10th Foundation Day The credit guarantor for Indian MSMEs celebrated its 10th Foundation Day in July at a function held at Vigyan Bhawan in New Delhi

Dinsha Patel Inaugurating the 10th Foundation Day of CGTMSE

GTMSE, the credit guarantor for Indian MSMEs celebrated its 10th Foundation Day in July at a function held at Vigyan Bhawan in New Delhi. The function was inaugurated by Dinsha Patel, Minister of State (Independent Charge) for MSME by lighting the lamp. The function

AUGUST 2010 | EVENT | DARE.CO.IN

was also attended by Dinesh Rai, Secretary, MSME; Madhav Lal, Addl Secy & DC (MSME), senior officials of Government of India, Banks, Financial Institutions, Entrepreneurs in MSE sector, representatives of industry associations and international agencies. Credit Guarantee Fund Trust for Micro

and Small Enterprises (CGTMSE) is a Trust set up by Government of India and SIDBI. Rakesh Rewari, DMD, SIDBI presented CGTMSEâ&#x20AC;&#x2122;s journey of 10 years, in his welcome address. Since its birth, CGTMSE has provided over 3.75 lakh guarantees for over `15,000 crore wherein more than

80% of the guarantees pertain to very small loans while nearly one third of the beneﬁciaries are women entrepreneurs or the minorities and weaker sections. Madhav Lal complimented CGTMSE on its achievements. He exhorted CGTMSE to continue to encourage banks and ﬁnancial institutions with innovative models for collateral free lending. Dinesh Rai, delivering the keynote address, mentioned that insistence on collaterals has been one of the major bottlenecks in MSMEs getting adequate and timely credit. He further stated that Banks / FIs

When it comes to international recognition, CGTMSE is a member of the Asian Credit Supplementation Institution Confederation (ACSIC), an association of Credit Guarantee Organisations in the Asian and Pacific Region, after being an 'Observer' for 2 years. Manas Kumar Nag, CGM – SME, SBI says, “SBI has had a good partnership with CGTMSE and I hope it continues in the same way.” Dinsha Patel in his address, while highlighting the Government of India’s efforts towards promoting this vibrant sector, mentioned various measures of Government of India

taries present, tracing the growth, achievements and successful functioning of CGTMSE over the last ten years. The 92 page coffee table book was produced, edited and designed by DARE team (Cybermedia Publications). The book has insights from and viewpoints of all the stakeholders of CGTMSE and SME sector. The book was well appreciated by the dignatories at the venue for its content and creative design. Another book - “SIDBI Book on MSME Database 2010” was also released by the Minister. The highlights of the event also included screening of a film made on CGTMSE's 10 years

Launch of CGTMSE Coffee Table Book –produced by DARE (L-R): Rakesh Rewari, Dinesh Rai, Dinsha Patel, Madhav Lal, OS Vinod

now have greater faith and trust in CGTMSE. While congratulating the small team of CGTMSE of 14-15 people for the remarkable progress in guarantee covers provided by it, Rai advised banks to advertise about the credit guarantee scheme by CGTMSE as the SME sector is acquiring huge size.

including setting up of Prime Minister’s Task Force on MSMEs, implementation of the National Manufacturing Competitiveness Programme (NMCP), and assured that Government of India is committed to the development of the MSME sector. The highlight of the function was the release of a book by the digni-

of successful functioning and the felicitation of the top three Banks and top two Regional Rural Banks having highest coverage under the Credit Guarantee Scheme. State Bank of India, Punjab National Bank, Canara Bank, Purvanchal Gramin Bank and Karnataka Vikas Grameen Bank were the recipients of the awards. R DARE.CO.IN | EVENT | AUGUST 2010 45

blogs/opinion

/Jayesh Badani

“Open Innovation”– Fastest Emerging Way to Innovate Groundbreaking ideas from every possible source can work wonders for an organization. Not limiting the sources to inhouse thinking, picking up ideas from a larger section of the society deﬁnitely helps the companies grow

onnectivity effect has not left anything untouched; everything we do is being rehashed and reborn, and innovation is no exception. Most of the leading organization’s strategy reads x percent revenue from new services or products. The accelerated demand for innovation outcome has made companies look for additional avenues to get innovation done. So what is “open innovation?” Open Innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at UC Berkeley. In his words “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”. Open innovation is not an open source in software. The open term here signifies the openness on the seeker's part to get the innovation

AUGUST 2010 | COLUMN | DARE.CO.IN

done, irrespective of the innovation source, get benefited from it and move on to the next one. Open innovation also does not mean innovation outsourcing but open innovation is based on pull from the solver to solve it; outsourcing is based on push, where enterprises contract fixed set of vendors to get the repeatable job done. From an open innovation seeker point of view, it is an act where one goes out to seek the innovative solution or an idea from a source which is either unknown or not appointed to do the specific job. If your account department guy has an idea for sales department, it could as well be called an open innovation (though happening inside the organization). Another example would be if BP accepts the solution to contain the spill from the Indian scientist, it is also an open innovation. Open innovation may or may not have a monetary reward associated with it, however most of the exam-

ples you would find have rewards (either monetary or non-monetary) to primarily increase the motivation level of solvers. Try any leading company name with “Open innovation” as keywords in Google and you will be amazed to find the traction this term has got. Almost all leading companies either have or are planning to have an open innovation strategy. Just in case you are thinking why would open innovation work better than the traditional way of innovating? Part of the answer lies in following four points: a) Power of many — the probability of problemto-solution match increases manifold when a particular challenge is shared with more talent sources b) Power of diversity — many of our solutions and sometimes even problems are biased by the similarities existing in either the people who handle these problems and create solutions, the environment or the educational or cultural background

of the people. It has been found that the diversity of any nature can dramatically increase success and also bring in some refreshing change c) Pull--typically gets more results than the push mechanism; open innovation is based on the pull mechanism and is primarily driven by the passion of the solvers. Reward and recognition add up to make open innovation far more effective than any other form of innovation for an enterprise d) “Open innovation” is like cloud computing for your innovation needs — pay as you go. P&G gets more than 50 percent of its ideas and solutions generated outside of P&G. Nokia has changed its stand to do only in-house innovation and is aggressively pursuing open innovation. The world famous and legendary open innovation case study is from Goldcorp, whose CEO Rob McEwen, when faced with a financial crisis because of the increased cost of finding gold in their mines, took a call to open innovate

in 2002. They received 1400 responses from 50 countries; mind you, all from the people who did not belong to Goldcorp and had never visited Goldcorp mines. They all provided the solution using the theoretical data Goldcorp had made available in locating the gold. The results were astonishing, 110 additional sites identified by the solvers, of which 50 percent were

Open innovation may or may not have a monetary reward associated with it, however most of the examples you would ﬁnd have rewards (either monetary or nonmonetary) to primarily increase the motivation level of solvers.

new, 80 percent of which produced gold. Total of eight million ounces of additional gold was found. Company value went up from $100 million to $9 billion (Pre-contest and post-contest). Having known the benefits of open innovation, the fundamental challenge an organization faces is how to go about doing it. To address this issue, there are quite a few intermediary platforms which enable organizations to realize the benefit of open innovation. R

Jayesh Badani is Founder & CEO of ideaken, an open innovation platform provider. Jayesh is passionate about how innovation is achieved using collaboration and how this experience be made more rewarding and enjoyable. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Jayesh Badani'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

DARE.CO.IN | COLUMN | AUGUST 2010 47

Barter Your Way to Success! In an era when the industry is embracing the slogan, “cash conserved is cash earned” on its sleeve, barter is the strategy many think of /Nimesh Sharma

SOURCE: Ormita.co.in

BARTER (bar¦ter) (verb) exchange (goods or services) for other goods or services without using money: e.g., I. he often bartered a meal for drawings II. they were able to buy or barter for most of what they needed

AUGUST 2010 | OPPORTUNITY | DARE.CO.IN

aving evolved from a most ancient system, barter today has acquired immense significance among the business community, from the perspective of saving costs and minimizing unutilized assets. In an era when the industry is embracing the slogan - “cash conserved is cash earned” on its sleeve, barter is the strategy many think of.

Ask Ashok Gupta of Dynasty Resorts. Gupta who engages in bartering resort rooms with his trade partners and has dealt with many barter companies, says, "We barter for approx `10 lakh in a year wherein we receive goods like linen, gift items, toiletries, furniture, mattresses and even media ads to save costs which are not trivial and to avoid cash outgo."

However, it is not trivial to land a barter deal. Most SMEs find it difficult to initiate the process. To such people help is at hand. A mini industry of intermediaries is thriving in India which helps companies identify and match their barter requirements. Some of them even help the companies to complete the barter transaction either online or offline using time-tested processes. In India, barter industry has bloomed in niches and corners. Companies such as Net4barter, Oneuptrade, Tradex, BarterBiz, Benefit Barter offer intermediary services to enterprises, each with a differentiated offering. While profitable, their scale is not comparable with the companies in the international market, especially the US where there are about 800 barter exchanges, and approx 400,000 businesses engage in formalized non-cash transactions. Meanwhile India boasts of about ten sizeable barter exchanges. Competition is hotting up a bit in this sector. International barter companies like Ormita Commerce Network and BBX are making their entry into India. Ormita Commerce Network commenced its operations in April 2010. They are trying to gain ground using their brand name, reputation and international network. It has already acquired close to 500 clients, including some big names, in their three to four months of Indian existence. With barter becoming a mainstream strategy for companies across the board, this is generally seen as an opportunity by industry insiders. Puneesh Mehra, CEO, Oneuptrade, expects the bartering industry to reach a size of `5000 crore in the next five years.

Barter scene in India Currently, the barter companies in India charge ﬁve to ten percent fee on the transactions and the biggest ones are doing a business of maxi-

Barter Industry Internationally Vital stats

USD 9.3 trillion Barter Trade’s pie of world’s total business 30% Share of Fortune 500 companies in barter 70% Share of media corporations using barter (Acc to AAA) 80% Share of NYSE listed companies doing barter 65% Number of businesses engaging in formalized 400,000 non-cash transactions in US Unproductive/Unsold assets/Dead capital globally

Number of barter exchanges in US

~ 800

Share of business transactions as barter in Switzerland

30% = USD 6 billion SOURCE: Ormita

mum `10-15 crore in terms of annual barter transactions. In the next ﬁve years it is estimated that media barter alone will account for `200 crore, retail barter industry is likely to log in a whopping `3,000 crore and corporate barter will account for `500 crore. The biggest barter exchanges are expected to do a business of about `50-100 crore in a year.

Where should you begin with bartering? Well, as a starter, ask your clients/ suppliers if they can barter (partially) a part of their requirements/supplies with you, with cash forming only a part of the deal or zero if possible. However, you should already know to what use you will put the items acquired. For instance, you can trade air conditioners for advertising with your client. A number of organisations already barter directly with their clients. However, its not always possible to barter directly. In such cases, barter exchanges come handy. Barter exchanges do what is difﬁcult or impossible to do in

direct barter. They market your products or services, eliminate the need for one to one barter, get new customers, act as escrow agent and source new suppliers for your business. They even record the value of barter transactions for you online and the really good ones provide you with multiple medium to transact – Online fund transfer, manual transactions, debit card online, fax transactions, phone banking and features like multiple currency dealings. Rajesh Kukreja, Optima Watches who has dealt with a number of barter exchanges bartering watches for gifts and for advertising says, “Getting the help of a bartering exchange is a good idea for companies to garner extra business.” However, you need not conﬁne yourself to just one form of barter. You can opt for media Barter wherein you offer your goods for media space for your organization which could be print, online, radio, TV, out-ofhome (hoarding, etc) or B2B barter is another option which essentially means bartering with a corporate DARE.CO.IN | OPPORTUNITY | AUGUST 2010 49

Rohit Mahajan Co-founder of Ormita India, and a veteran investment banker, on the barter industry in India

Why should a business barter? As a business, you have several goals for yourself. Bartering helps you achieve them with little more ease as you have the support of a barter eco-system. Business can beneﬁt in the following ways as bartering: • Reduces existing cash costs and saves cash as you make purchases out of revenue generated from new sales-–not existing cash reserves • Creates value from under-performing assets/unsold time or capacity. Timesensitive products, space, tickets or services are unrecoverable if not sold. Receive more value than discounting • Lets participants buy goods and services at a discount. Use your spare time, excess capacity, depreciating inventory, etc to make purchases • Offers interest-free ﬁnance with no cash repayments. Repay borrowings out of new 50

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sales-–not from existing cash income but by giving goods and services • Promotes local business At Ormita Commerce Network we facilitate our members to transfer their existing ongoing cash expenses to non-cash basis

"It may be easier for bigger players to start a barter exchange, but it's quite difficult for a small business to do so, as this requires a very efficient team, transparent policies and efficient IT infrastructure."

and offset these expenses incurred on a non-cash basis through incremental (new) sales. Once those expenses are covered, however, by existing cash business, then every additional customer through Ormita is new revenue, with a higher margin of proﬁt. All this is done by arranging local networking meetings, online trading platform, producing an electronic and printed membership directory, sending email and SMS broadcasts of latest deals and distributing regular newsletters to participants. What best practices should a barter exchange observe so that the barter industry takes over a good part of Indian business? Trade can be a valuable tool for any business, however the value of any trade credit is only

as good as the company managing it. Be sure to ask questions, do your research and never hand over money until you know that you have a way (and a plan) to spend as well as earn. 1. Ask to see their corporate profile, including directors, business structure, vision and mission 2. Do an Internet search on the company, its management and its owners 3. Ask to see their marketing material / sales literature to inquire about the different aspects of its business 4. Find out about the financial management skills and qualifications of the owners to ensure safeguarding of your assets 5. Assess the integrity of other members 6. Find out if there is anything to buy. Make a list of all the products and services you purchase regularly and make sure that the exchange offers at least some of these on an ongoing basis 7. Ask if they charge a fee when you buy, sell, or both. Your total fees (buy plus sell) should be less than 10 percent 8. Ask the exchange to explain their credit management policies and accounting procedures for its own financial viability 9. Request a copy of their policy on ‘deficit accounts'. Have from them in writing that they do not, and will not, operate a deficit account 10. Make sure you can sell, but also that your income won’t exceed your ability to purchase 11. Find out how to perform transactions. Do they offer multi-channel support for the trading? 12. Investigate their accessibility and office hours which should be atleast ten hours owing to varying work hours 13. Find out if you are allowed to sell in part cash to cover your Sales Taxes and nonfixed overheads How can the small players be a part of this barter industry as facilitator? Or is it a reserved domain? Well, it may be easier for bigger players to start a barter exchange, but it's quite difficult for a small business to do so, as this requires a very efficient team, transparent policies and efficient IT infrastructure. However, in my knowledge, there are a few barter exchanges in India including us which plan to offer franchises in near future, as the volume of members is going to explode. So only till that time, entrepreneurs will have to wait.

Media company Walt Disney has entered into a barter deal with News Corp and NBC Universal wherein it will provide free Disney content to be aired on their website Hulu.com and in lieu, has taken an equity stake in the site.

Hollywood movie stars often choose to accept the barter option and take an ownership stake in the ﬁlm while passing on upfront fees for starring in a movie.

Some examples of high-proﬁle barters done internationally Universal Studios Home Video, Twentieth Century Fox and SKG have negotiated a barter deal with kozmo.com wherein it has taken non-cash equity stakes and is providing Kozmo with videos and DVDs at lower prices.

client/supplier, exchanging goods or services mutually. You can also barter through a barter exchange. Here you could get a whole lot of services/ goods with more diverse variety, with clients ranging from corporate to retail. See the benefits in the Q&A. You should choose an exchange which lets you meet and negotiate with other barter members. If you are doing retail barter, you are bartering with your multiple retail clients which is probably the model followed by media companies. Sushant, Group Head, Resonance Media, who has been bartering media space for ACs, tyres, and cosmetics very frequently, expects more diverse products to be available with the new upcoming barter exchanges and says exchanges are better as clients tend to give inflated prices while dealing directly. So, while barter exchanges are making sure clients get real prices, help save cost along with acquiring new customers, offer interest-free finance with no cash repayments and promote local business; the barter often comes at a cost. You may feel the pinch of the membership fee which

Hollywood Actor Bruce Willis took a 3.3 percent barter equity stake in Belvedere, the French spirits group, as payment for promoting its vodka brand Sobieski Vodka.

some exchanges charge, if you don't utilise the services fully. As some exchanges buy on barter, and sell on cash and vice-versa, you may feel cheated as your product is sold at inflated price which may dilute your brand equity. Additionally, if you are not negotiating enough, you may end up paying a fee on both selling as well as buying, which will increase your cost. However inspite of all these cons, Barter Exchanges, especially the upcoming ones, with proven track record are giving fair deal to their members as they have transparent policies. If you are an entrepreneur or SME just out of the brunt of the recession, bartering may be the way out for you to save on cash costs and expanding to new markets. This is one industry, which if you know how to utilize well to your benefit can lead to significant growth and more importantly higher efficiency in your business! The tipping point in getting on to barter system is in considering the barter system as equivalent to cash system and giving it the same importance. Only then, you'll be able to leverage its benefits. R DARE.CO.IN | OPPORTUNITY | AUGUST 2010 51

blogs/opinion

/Srikala Bhashyam

From Entrepreneurship to Enterprise Entrepreneurship takes wings when ideas become much more than just passion. Read on to ﬁnd out how an idea clicked into a full-ﬂedged business option in hospitality

ntrepreneurship often is a result of an individual’s passion for giving life to a dream. It could take birth anytime and anywhere and can become successful as long as you get your timing right. While the ﬁrst phase of entrepreneurship is all about living your passion, the second leg or phase is all about getting it right strategically. This is a deﬁning phase for the enterprise and the entrepreneur's leadership leadership skills are put to test. How does one transform an individual entity into an enterprise? Many things go into it but the primary requisite is the entrepreneur’s ability to think big. It would make it more interesting if I tell you one such story.... The CEO of Compact Hometel, Suresh Tota, started his entrepreneurship journey in a small way like many. What triggered his business idea was the thought of cost saving. As a software professional, Suresh had to travel to many tier I and tier II cities but what pained him most was his accommodation bills. In the early 90’s, for a person with a monthly pay packet of `3,500, the travel bill on a weekly basis was even higher. The cost conscious Suresh wanted to do something about it, “I felt it was a crime to pay a daily rent of `500-600 per day and what was worse was the 52

AUGUST 2010 | COLUMN | DARE.CO.IN

Rather than creating a property and waiting for my clients to use them, I decided to offer what they needed. I started looking at multi properties and scaled up continuously by setting up facilities in different locations

lack of choice. Either we had star hotels or very ordinary hotels,” recalls Suresh. He decided to do something about it. His thinking was, why not make the company pay the same money to him? He came out with the concept of serviced apartments. Serviced apartment was an unknown or lesser known concept during those days. Suresh took a loan and built a house with 12 rooms in a prime location in Bangalore and offered it to his own employer. To be successful, all he had to do was tell a couple of MNCs about the facility and business started ﬂowing in. When a business idea attains success intially, you can be sure that

competition is round the corner. Either you have to scale up your enterprise to the next level and turn innovative to keep the ball rolling; else success will be short-lived. It was the same case with Suresh too. The acceptance of the concept itself posed a challenge as good demand meant shortage of rooms and these in turn meant clients’ requests for rooms being turned down more often than not. Clients began to look elsewhere. Suresh recalls, “All of a sudden, business fell by as much as 40 percent and when I approached my clients, they told me that they began to look at other options as I didn’t have rooms to offer when they needed.” I realized that I had to change my business model. Rather than creating a property and waiting for my clients to use them, I decided to offer what they needed. I started looking at multi properties and scaled up continuously by setting up facilities in different locations," he adds. The expansion has been continuous with the room strength for the serviced apartment increasing at a rapid pace. If the ﬁrst landmark of 100 rooms was achieved in 2001 after a good ﬁve years, he has taken only nine years to push it up to 1000.

Suresh is looking forward to reaching a milestone by the end of the current calendar year. But the interesting story has been the shift in the strategy at regular intervals. While he started off the business by constructing a property for meeting the business needs, the strategy was different during the second phase. During the mid 90’s, Suresh entered into an agreement with vari-

ous property owners who let out their property for serviced apartments. As the business began to expand in line with the customers’ growth, Suresh realized that he needed larger manpower which was trustworthy. As he points out, in the hospitality business customer’s interaction is with the staff at the ground and not with the CEO. Hence, keeping the employee happy and committed is a chal-

You have to think like a large company as you get older in the business. Only then growth will take place. — Suresh Tota

CEO, Compact Hometel

lenging task. Of course, not to mention the fact that keeping 600 odd employees is more challenging than humoring 10-12 people. Needless to say, the transformation has to be within and from outside. While it is all about creating a good revenue model for an entrepreneur with his dream idea in the early days, building the enterprise requires creation of process, inculcating value system amongst the employees, a good HR policy for the workforce and more importantly, a strong cashflow management for sustaining growth. After a decade, Suresh, like many entrepreneurs, is bracing up for the next leg of transformation of his business. As he points out, the business in itself has been divided into three verticals with a senior manager handling a vertical. The tie-ups with property owners are no more ad-hoc and instead there is a written policy for every deal. In fact, a property developer or owner has multiple options to choose from for revenue sharing. On the HR front, employees go through rigorous training and more importantly they have the option of becoming partners through their contribution in property acquisition. Ask Suresh about the strategy for transformation from entrepreneurship to enterprise, his answer is simple. “You have to think like a large company as you get older in the business. Only then growth will take place.” He is also a firm believer in outsourcing as according to him that is the only tool for effective time management. His word of advice for all entrepreneurs is delegation and more delegation. R Srikala Bhashyam is an investment consultant and runs her own consulting firm in Bangalore. She has been a regular columnist for the print and internet media on personal finance. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Srikala Bhashyam'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | AUGUST 2010 53

TechCorner

Open Source Software /Kunal Dua 54

AUGUST 2010 | TECH CORNER | DARE.CO.IN

TechCorner OSS ADOPTION MODEL Free. The word that attracts most people to the open source world. While Open Source Software (OSS) gives you the freedom (as in free speech) to do whatever you want with the code, most people, at least in the early part of the OSS journey, are attracted to the more "tangible" freedom, as in free stuff! Traditionally, OSS has seen a bottom-top adoption model, wherein an engineer sees a cool open source solution that he believes can solve a problem and suggest it to his team. Off late however, a more top-bottom approach is increasingly being seen wherein the management, aware of the value that OSS can bring to the table, drives adoption. As a team adopts an OSS solution and customizes it according to their needs, they get a better understanding of not only the software itself but the OSS philosophy also. They may feel inspired enough to push some code back to the community, thus shedding the mere consumers tag and moving into the contributors' category. The OSS spirit is starting to take shape in your organization! Encouraged by the success of OSS solution in one project, an organi-

zation may feel tempted to adopt similar solutions in other projects; not only within the organization but may start recommending it to clients as well. The management starts to get involved and actively start looking for areas where they can adopt an OSS product and build solutions around it. OSS adoption doesn't need to be limited to in-house projects or developing bespoke solutions for clients. Some of the more liberal licenses (see "Some more open than others") allow you to take an OSS product, build a commercial product on top of it and sell it at a profit. Many shareware utilities are nothing but GUI wrappers around open-source command line packages. Of course things are rarely as simple as a line on a graph and you might face multiple difficulties along the OSS adoption path. Like in any other sphere of life, while some products can be a joy to work with, others may leave you pulling your hair out. Worry not. Our aim is to help you get started on this journey and discover that while the OSS world may baffle you at times with its peculiarities, it can be a very rewarding journey in every sense of the word.

SELECTION PROCESS How to identify an OSS solution that fits your need? IDENTIFYING REQUIREMENTS Before you start looking out for an OSS solution (or any solution for that matter), it is important to spend some time preparing a list of requirements; i.e. trying to figure out what exactly it is that you need. The best way to do this is to look within the organization and getting various stakeholders (people who'll be using the said solution) involved in the process. Break these requirements into two or three categories, depending upon the relative importance of the feature. The first category, say, "must have", contains the features that any solution you zoom in on, absolutely must contain. For example, if you are looking to adopt a new collaboration tool, email and IM integration might fall in this category. Next category of features would be "nice to have". As the name suggests, these are not as important as the previous category but which would make your life a lot easier. Allowing user to do a full text search within attachments would perhaps be a collaboration tool nice to have . The final category, which we call "bells and whistles", are features, say, AJAX support, that may not add an additional functionality to the solution, but are perhaps a better way of achieving the same thing. Of course, this is just a suggested classification technique. You can use any other technique e.g. rating requirements on a scale of one to ten or anything else that helps you prioritize. When you have two or more teams or individuals trying to figure out the requirements, arguments are bound to happen wherein everyone feels their requirements are on a higher priority than the others. A coordinator or a "devil's advocate" to ask people questions like "Do you really need this?" or "How will that help you?" goes a long way in keeping the requirements in DARE.CO.IN | TECH CORNER | AUGUST 2010 55

TechCorner larly, if you plan to build a commercial product around or on top of open source software, stay clear of the more strict licensed software to avoid any controversies.

check and ensuring you have a reasonable list of requirements at the end. Make sure that everyone feel represented in this activity and that in the end there's an agreement on the list and priority of the requirements. MATCHING REQUIREMENTS WITH OSS PROJECTS Once a list of requirements is agreed upon, you can start the process of evaluating the products themselves. Comparing the feature-set of the product with your list of requirements and choosing the best match might seem like oversimplifications, but it's a start. In case you are lucky enough to find a close match that also fits your constraints (see below), go for it. More likely, you may find solutions that almost live up to your requirements and others that match your requirements but do much more. While the latter may sound like a good problem to have (or maybe no problem at all!), once you install the product you may find out that the features you do not plan to use are intrinsic to the product and end up adding a layer of complexity and confusion to the end-users that you could do without. In case a product falls short against your requirements and there are no other real alternatives, you have the option of scaling back your requirements ("Do we really need this?") or, alternatively, bridging the gap on your own. This means getting your in-house IT team involved to develop the missing features or hiring someone from the outside. You can even submit the feature request to the core team of developers and hope they incorporate it within the product, but do not keep your business waiting on that—most projects have a roadmap of features planned at least six months in advance, and getting your feature in anytime soon, if at all, may not be realistic. While we've discussed the business and functional aspects of the requirements so far, one shouldn't 56

AUGUST 2010 | TECH CORNER | DARE.CO.IN

SELECTION PROCESS completely disregard the technical aspects while evaluating a product. A solution that perfectly matches your requirement but does not run on your current hardware or is based on a technology that your team is unfamiliar with may not always be preferable to a solution that almost matches your requirement but would run just ﬁne on that old server you have lying around. You might be able to get the missing feature developed by your existing team of developers and still have cash left in the bank from savings on the server. SOME MORE OPEN THAN OTHERS Not all open source software are equal in terms of what they let you do with the code. While going through any open source project you'll ﬁnd that the code is released under a particular license and what you can do with that code is determined by the terms of that license. These licenses have an impact on how proprietary or custom code added on top of the open source code is to be handled. Some licenses like that of Apache and MIT let the user mix open source and proprietary code without the need to contribute back, while other more restrictive licenses like GPL insist that any changes made to GPL code must be released back to the community. In case you plan to modify any OSS code and incorporate some business critical code that you won't be comfortable sharing with all, you are better off looking at projects released under the more liberal licenses. Simi-

OSS PROJECT SOURCES So where to get started? There are dozens of places where you can ﬁnd open source projects that suit your needs, out of which Github, SourceForge and Google Code are perhaps the most popular. Not only can you let the sites host the source code, but also offer other tools like Forums, Wiki, etc., that help the project community interact with each other. A word on contributing your code back to the project. While most projects do have some kind of review mechanism in place, some projects are very liberal wherein almost anybody can submit patches or code that implements new features. Sites like Github that are built around distributed version control systems, take collaboration to another level by letting anyone "fork" (copy) a project, make changes and then send a request to the original project to "pull" your changes in. The reviewers of the original project can take a look at your changes, and if they like what they see, can commit your code to the main repository with one click.

OSS METRICS Some basic metrics to help you evaluate various OSS solutions. STABILITY A well-established release management system is a good indicator of the stability of a product. Most products will have a roadmap that gives an idea about the near, mid and long term direction of the product. Looking at this roadmap gives you an opportunity to evaluate the goals of the product, and see if they are in line of their own. If a roadmap tells you where the product's headed, one look at it's recent releases will tell you what the

TechCorner project's delivered. Go through the release notes to understand what the team has been shipping lately—adding new features or simply ﬁxing bugs. Another thing to look at is the frequency of releases. While an "agile" development may work great for a FTP client, you probably don't want to be updating the OS on your production box every two weeks? A product with an average of, say, a release every three months is perhaps better than a product that sees no activity for two years, and then ships six updates in a month. Do remember that there can always be exceptional circumstances that can dictate the development lifecycle of a project. QUALITY This one is slightly trickier to evaluate without using the product. You can start off by looking up what kind of bug tracking mechanism the project is using. The name of the bug tracking solution that a project is using is not as important as the fact that they are using one! Go through some of the recent bugs, without getting all technical, to get an idea of the frequency and quality of bugs being reported,and the typical turnaround time on most bugs. A critical bug, that lets a malicious user exploit the vulnerabilities in the product to take control of your machine, that has been sitting there since 2005, is probably not a good sign!

Now we are not suggesting everyone would understand all the technical details typically available on a bug tracker, because you don't need to. Common sense and a little bit of time spent on this activity can take you very far. LONGEVITY As with traditional IT vendors, how long you've been in business is usually (but not always, admittedly) a good indicator of how much longer you are going to be around to support it. Now we've been around long enough to know that success in the past is no guarantee for success in the future or that there's no such thing as too big to fail. However, it's equally important, to use another cliché, to watch out for the ﬂy-by-night operators. While a newly launched project may look promising, it's perhaps prudent to wait and watch if the core team of contributors is just as enthusiastic about the project six months down the line.

OSS METRICS

INSTALLED BASE While you may not get an exact figure on the number of people using a solution, most products do feature a list of organizations using their solution. Some even feature case studies on how these organizations have incorporated the product into their setup. In case this information is not available, a simple look at the number of downloads the product has seen since launch is a good indicator as well. A larger installed base also means a larger community for you to turn to for support. Go through the support forums and mailing lists to get a feel of the community at large. DOCUMENTATION The bane of many OSS products, the importance of good quality, updated documentation cannot be overstated. Documentation is considered a pain by most developers, so you'll find that quite often this part of the pie doesn't quite match with the rest of the project. This problem is not limited to smaller, low profile projects with limited developers or a small installed base. A project as high profile as Ruby on Rails has been criticized for out-ofdate documentation. If you are going to be dependent on the open source community for help, make sure the solution you choose has up-to-date documentation.

OSS SOFTWARE LIST Some of the popular OSS for each category. Please note that this is not a comprehensive list of all OSS solutions in the respective categories. Operating Systems Linux (multiple distributions), FreeBSD, OpenSolaris Office Suite OpenOffice (multi-platform), NeoOffice (Mac) IT/Networking Nagios, Hyperic HQ CRM SugarCRM, SplendidCRM, hipergate ERP OpenERP, Compiere ERP, OpenBravo ERP

WebServerSoftware Apache, lighttpd, nginx Website/CMS Wordpress, Drupal, Plone CMS, Radiant CMS Electronic Design Automation KiCAD (multi-platform), gEDA (multi-platform), Magic (Linux) ETL, Data Management and Transformation Talend Open Studio, KETTLE (Pentaho) Data Backup Amanda (multi-platform), Bacula (multi-platform)

Email, Chat, Communications Pidgin (multi-platform), Adium (Mac) FTP, P2P FileZilla (multi-platform), WinSCP (Windows), Cyberduck (Mac), BitTorrent (ofﬁcial client, multiplatform), aMule (multi-platform), Limewire (multi-platform). Remote access and management TightVNC (multi-platform), UltraVNC (Windows) Animation Processing (multi-platform), Blender (multi-platform)

Personal Information Managers Chandler (multi-platform), Spicebird (multi-platform) Antivirus Clamwin (Windows) Firewall & Network security Endian (Linux), Untangle (Windows) Graphics/Multimedia Software imgSeek (multi-platform), VLC (multi-platform)

DARE.CO.IN | TECH CORNER | AUGUST 2010 57

TechCorner

CASE STUDY

CS India Steel I

am writing this using Open Office on a laptop with Ubuntu as its operating system; the Open Source equivalent from Oracle of Word and Windows respectively. My exposure to Open Source dates back to the 1990s. At that time I was a Director, Finance & IT, of Odyssey Tours, the travel company. Frustrated with continuous maintenance problems with Windows, I was looking for ways to reduce this. I still remember the weekend that all the IT staff worked overtime to solve a broken link between a workstation and the database server. They finally discovered that the solution was the order in which two common Windows programs were installed. Frustratingly the lessons learnt from this were zero! We had no idea what was so special about the version of the particular Dynamic-Link Library (DLL) file that caused the problem. Two years ago when I had to set up a new manufacturing unit for a Dutch MNC in Udupi, Karnataka, I had to make choices. I was keen to do away with Windows software in order to re-

duce maintenance and high licensing fees. Most PC users only use email, a browser, a word processor and probably a spreadsheet program. Those users, like myself, can easily use a Linux PC as all the required software is freely available. Regrettably very often there is just one crucial program that is only available on the Windows platform. Our company-speciﬁc software to run our production machines was only essential for a couple of users. For our ERP system we opted for SAP Business, one which I found very comprehensive for a manufacturing unit like ours. Unfortunately, this was only available on a Windows platform. We did play around using a product called GoGlobal, a fast and affordable way to securely publish your Windows programs to your network, and apparently used at the time by Deccan Airlines. However, that turned out to be only compatible with Debian Linux and we simply ran out of time to test this properly. A compromise was therefore warranted and I opted, albeit reluctantly, to use for the time being mainly Windows-based PCs. Linux ﬁle, mail and web servers are all robust and well-tested systems and you would be silly to select otherwise. We run ours on CentOS, the community-based Enterprise Linux OS. It is based on RedHat without the bleeding edge technology for which Fedora is known. In a company one would like to see oneself as advanced but, believe me, certainly not when it comes to the use of software. Let other people encounter and solve the newly found bugs. You want your workforce

Alfred Tuinman Dutch CEO, CS India Steel Pvt Ltd 58

AUGUST 2010 | TECH CORNER | DARE.CO.IN

active and not idle, frustrated with an overworked IT department. These days to set up a ﬁle, mail and web server is quite easy and, if the required skill is not in-house, one can hire a consultant to speed this up. I did hire Shekhar, a consultant from IT4enterprise.com to solve some Active Directory related issues with our Linux ﬁle server. The IT manager, mainly acquainted with Windows, was very happy as he hardly had any outstanding tickets to resolve and was offered to follow any Linux course of his choice during business hours. The last few Linux software items we added were SugarCRM, a webbased CRM solution and particularly handy for our roaming marketing staff and WikiMedia, a wiki (of Wikipedia fame) for our intranet which enhanced our documentation of policies tremendously. Finally we purchased a Synology Diskstation, a smart RAID5 NAS system which is available for Windows, Linux and Mac users. To my delight I discovered that the small 4TB box actually runs on a slimmed down version of Linux. The bottom line is to get the most out of your IT investment. Linuxskilled staff does cost more than staff trained to use Windows. However, I am convinced that this increased cost factor easily outweighs the extra problems Windows users have to face, not to mention the extra license fees. To those that still doubt this I have the simple question: how many PCs do you have on standby and how often do you replace the disk image of a PC user? Alfred Tuinman is the Dutch CEO of CS India Steel Pvt Ltd and has been living in India for many years. He was trained as a zoologist (BSc), Financial Controller (Masters), and an Information Security auditor (CISA). According to him, corporate life is just like the Darwin's theory: it is not about strength but about speed to adapt to change. IT and management style are therefore key enablers. His website is www.ourmaninindia.com

CASE STUDY

TechCorner

Random Loops uses it to track bugs, forthcoming releases and an ideal dumping ground for internal as well as external projects. For version control the team chose to keep it simple and use Subversion. We evaluated various Distributed Version Control Systems (DVCS) like Git, Mercurial and Bazar but decided to go ahead with Subversion because we were already familiar with it. However, we do realize that DVCS are the future and deﬁnitely plan to switch sometime soon, thanks largely to the increased ﬂexibility they offer. They also use Warehouse, a web-based Subversion browser that makes viewing your subversion history and comparing revisions, a breeze. Anyone who thinks OSS don't have good UIs, should take a look at Warehouse—it's a delight to work with. For keeping in touch with Rootein customers, the team uses a mix of Twitter as well as the Rootein blog. They use Twitter for keeping the audience engaged with updates like "Rootein quote of the day", inspirational quotes that sit well with their audience and inspire them to use Rootein more! Their blog, powered

by Movable Type because out of the box, it handles large amounts of traffic better than Wordpress , is used for more detailed posts, for announcing new features, service outages, behind the scenes look at Rootein and the likes. They're in the process of implementing PhpList to help reach out to their customer base with a newsletter. PhpList takes a bit of time to setup the way you want but it compares favorably with the commercial mass mailing offerings in terms of the flexibility as well as features. Besides using OSS for in-house IT needs, almost all of their solutions are based around open source products and technologies. Rootein is built on top of the popular Ruby on Rails (RoR) framework. They used Radiant CMS to build a custom website for one of their clients and swear by its flexibility and ease of customization. OSS products offer a great starting point for almost any kind of requirement—it's so much better than starting from scratch, adds Amitabh. For example, any web developer who doesn't use jQuery or Piwik, an open source alternative to Google Analytics, is just doing it wrong.

Random Loops R

andom Loops was setup in 2009 with the aim of providing great web design and mobile solutions to clients worldwide. Random Loops follows a mix of service as well as product based models, wherein while working with clients they have also launched Rootein, their ﬂagship Software As A Service (SaaS) offering. Rootein is a self-improvement application that lets you build and track habits, while keeping it fun and simple. "We started off as a couple of guys who quit their comfy jobs to start something we are passionate about," says Amitabh Jotwani, co-founder, Random Loops. "All our products and solutions so far have been built on the foundations of OSS. We are strong believers in the OSS philosophy and have found that open source products not only match but often exceed the quality and feature set of their commercial counterparts." For project management, issue tracking and WiKi-based collaboration, they use Redmine, a web-based OSS tool that you can run on your own server. Every member of the team gets their own login and are assigned to the projects they work on.

Amitabh Jotwani Co-founder Random Loops

Kunal Dua Co-founder Random Loops DARE.CO.IN | TECH CORNER | AUGUST 2010 59

TechCorner

CASE STUDY

Elitecore T

o gauge what has been the experience of one other SME in adopting and implementing Open Source Software, we interviewed Abhilash Sonwane, Vice-President, Product Management, Elitecore, a provider of Cyberoam UTM appliances. Elitecore's other divisions include CRESTEL Convergent Billing Solution that meets the voice, data, video billing and customer care requirements of Tier-1 service providers and online billing and bandwidth management solutions for hotels, hotspots and Internet service providers.

Usage of OSS Elitecore has been mainly using Linux among the OSS, since long, for almost all the needs in their organisation. It develops its software and provides all its services using Linux Operating System. And it has been extremely satisﬁed with the experience. In turn, it has taken efforts to further develop this open source technology to develop a new product called Cyberoam iView. Cyberoam iView is an open-source logging and reporting solution, also available in appliance mode, offering

real-time visibility into activity within the organization for high levels of security, data conﬁdentiality and regulatory compliance. As a philanthropic activity, we are contributing back to the community, by developing Cyberoam iView and making it available as open source software, says Sonwane. Through Cyberoam iView, any CIO can monitor and control complete operations of the whole organisation, its network, bandwidth utilization, etc. by sitting at once place, just like an Air Trafﬁc Controller. With the involvement of the open source community, it aims to add more such popular and widely used network devices, servers, databases and operating systems rapidly. iView has had 18,500 downloads till date since they launched in Sept 2009. The development community and organizations are free to download Cyberoam iView from sourceforge.net. Available as open source, the solution has a ready list of projects which would help organizations, particularly small and medium enterprises, in bringing logging-reporting over multiple devices and locations over a single, consolidated, centralized interface, helping them meet the requirements of regulatory compliance.

Beneﬁts On being asked why they chose Linux, Sonwane says, "OSS offers ﬂexibility and can be customised to our needs. Besides, there is no compulsion to buy the whole software. Buying/AMC is only mandatory in cases of commer-

Abhilash Sonwane Vice-President Product Management Elitecore 60

AUGUST 2010 | TECH CORNER | DARE.CO.IN

cial usage, which is fair as someone has to bear the cost of development and sustenance. Moreover, advanced versions of the product are frequently available as there are a number of developers improving it. Also, they can be used with other commercial applications without any restrictions.

Challenges Talking about challenges faced while using and implementing OSS, LK Pathak, Chief Manager Corporate Communications at Elitecore, says, "Today, one has to match up to the speed of obsolescence in OSS which is very fast. As not just a company but the whole developer community is engaged in further developing the software." So, one constantly has to upgrade the software or else we'll go out of business. Additionally, one has to make sure that the software offered is actually an intelligent solution for the users' problems. Being user-centric is but inevitable. Also there is the general issue of making money since it s a freely downloadable software.

Recommendation "Yes, its a great boon to the tech community and I would reckon it as a major innovation of the 21st century," says Pathak Former president APJ Abdul Kalam once expressed his wish that Indian companies should use Open Source Solutions and should contribute to developing them further. India should become producer from just being a consumer of OSS. "C-DAC and NRCFOSS are taking an initiative for an Indian GNU/Linux distribution - BOSS (Bharat Operating System Solutions), in order to increase the usage of Free/Open Source Software throughout India to be useful to the non-English literate users," informs Sonwane.

TechCorner

Need to run transaction intensive applications? No Problem!

ostgres a creation of Michael Stonebraker, a University of California, Berkeley (UCB) professor who led pioneering database systems development, retains a lot of classic database concepts and some advanced object relational database features. It is completely free and was among the early software systems to embrace open source, way back in 1996. Postgres apart from MySQL is a perfect match for enterprises. While MySQL has had the dominant mindshare, we chose to put the spotlight on Postgres since it offers some unique features matched only by commercial database systems. EnterpriseDB offers Postgres distributions and service and support to enterprises. We spoke to Rohit Rai, Sales Director, India South East Asia & Australia, EnterpriseDB. Excerpts. What is the learning curve for Postgres Plus Advanced Server from EnterpriseDB? Postgres Plus Advanced Server is based on PostgreSQL and so it looks, feels, and behaves just like the open source community version of PostgreSQL. As a result, the learning curve is extremely short and easy for those features that are unique to Advanced Server such as InﬁniteCache and Oracle compatibility. For individuals and organizations that are looking to accelerate their learning curve, EnterpriseDB offers a full range of training classes - from basic to advanced database administration, as well as classes geared speciﬁcally for software engineers looking to develop new applications on Postgres. Additionally, EnterpriseDB offers a variety of subscription support services from short-term Jumpstart and Developer Subscription all the way to 24 X 7 Premium Subscription, so new users know that help is only a phone call away. How do small enterprises adopt Postgres Plus Advanced Server? The rate and type of adoption varies

depending on the needs of the organization. For Oracle enterprises, Postgres Plus Advanced Server is typically adopted in a complimentary strategy such as replicating Oracle data to Advanced Server for reporting and business intelligence applications – increasing the performance of the Oracle application while supporting their need for greater insight into their data. This saves money on additional Oracle licenses and improves performance both on the Oracle transaction system as well as for the reporting applications. For organizations that are looking to deploy new applications on a cost-effective database platform, Advanced Server offers exceptional priceperformance characteristics that support the needs of transaction-intensive enterprise applications. Most customers of EnterpriseDB will typically take advantage of our training classes and support services to equip their IT staff with the necessary skills to maintain and administer their Postgres environments. What level of support does EnterpriseDB provide to small enterprises? EnterpriseDB is the only world wide commercial business behind Postgres providing software subscriptions with break/ﬁx support, service engagements for various database infrastructure needs, and training targeted speciﬁcally for DBAs and Developers. Enterprises are free to engage with EnterpriseDB at any level they need and at affordable prices. Additionally, EnterpriseDB provides staff-augmentation services through RemoteDBA services, enabling organizations to immediately upgrade their Postgres skills at a reasonable cost. How is Postgres Plus Advanced Server different from MySQL and other commercially available products? Postgres Plus Advanced Server is suited to a wider variety of applications than

Rohit Kumar Rai EnterpriseDB, Sales Director India, South East Asia & Australia

MySQL because of its longer development history and deep relational database feature set. MySQL is good at read-mostly applications where transaction integrity is a lower priority than simplicity to setup. Advanced Server excels at Read-mostly, Write-mostly (OLTP), and Read-Write application profiles for large-scale operations of data and users where data integrity AND performance are toppriorities. How does Postgres help with lightweight databases in the cloud? Postgres Plus Advanced Server runs extremely well in a cloud environment. No special configuration is needed to install or run Postgres Plus Advanced Server and its performance scales very well as more virtual machine cores (up to 64) are added. Many of the new lightweight cloud databases belong to the 'NoSQL' movement. What most people don't realize is that these database systems are sacrificing data integrity for data scalability. This is okay for the right kind of applications such as social networking sites; however, these databases are not appropriate where data integrity is important such as largescale financial, business to business, healthcare, engineering, and insurance applications.Businesses must carefully evaluate what kind of application they have and how important data consistency is to them versus the ability to scale up data storage. R DARE.CO.IN | TECH CORNER | AUGUST 2010 61

investor of the month

A R Jayakumar CEO, KITVEN Funds Jayakumar has more than 23 years of experience in the field of banking and venture capital. Karnataka Information Technology Venture Capital Fund (KITVEN Fund) is committed to providing investments to the SME sector, especially in the field of information technology, biotechnology, and nanotechnology in Karnataka and in the process will help in bringing about competitive products which can move up the value chain. It is also involved in financing for growth and expansion of already established companies. They understand the need to provide more than just financial support to upcoming and promising companies and associate with businesses which can have an economic and developmental impact in the state. They are on the lookout for management teams with a strong and dynamic spirit and an established track record which will have the potential for substantial future earnings power and increased market share /Shradha Mohanty hat do you look for in an entrepreneur before investing in his future? Normally, in an entrepreneur we look at his credentials and a good track record. Apart from this, since we will be working together, we also look for a strong sense of integrity and commitment in him/her. It is very important for us that he or she is sure and passionate about the whole venture. Another important factor that is considered is the team in place-both the entrepreneur and his team need to be dynamic in nature and should have an unparalelled synergy.

What are the typical mistakes an entrepreneur commits when seeking investments? While we understand the excitement 62

AUGUST 2010 | BIO | DARE.CO.IN

of starting one's own venture, the most common problem that we have noticed over a period of time is that the entrepreneurs coming up with plans which are overambitious and having unrealistic goals. In their excitement, they tend to set targets for themselves which are unachievable. We, as investors, try to make them understand by guiding them about the hurdles they are likely to face. When we see that the entrepreneur is being overoptimistic with his or her plan, we sit down and have discussions over the roadmap. What is your level of involvement in an investee company? We have a board of directors who do the routine discussions and reviews with the company. Our involvement really happens only at these board

meetings. We give the company and the entrepreneur enough freedom with their day-to-day activties. We do not interfere in the area of daily operations. Our focus is more on the direction the company is headed towards. We procure monthly statements to see what are they achieving as a company. If things seem to be going bad postinvestment, do you get involved operationally? Well, it is not really in our interest to get involved operationally. What we do instead is try and identify the reasons for anything that is going wrong for the business. We also ﬁnd out how and how much of the things are deviating from the original plan. There might be plenty of reasons for things to not

work out. Sometimes there might be a fault in the plan itself or sometimes it may occur due to the people involved. Whatever be the case, we help the entrepreneur in assessing the mistakes committed and bringing the business back on track. How do you decide on a timeline in which you would want to make an exit? Normally, we stay invested in a company for a minimum period of three

to ďŹ ve years. Other than this, we do not plan as such about the exits. We are always mentally prepared to take the right decisions at the right time, which is in the interest of both the entrepreneurs as well as us. What are the areas of conďŹ&#x201A;ict (of interest) with the investor that an entrepreneur should be aware of? We are not really familiar with conflict situations because everything

is already discussed and taken care before hand. It is only when the entrepreneur goes in a completely different direction that we go for finding out the reasons and the circumstances that led to it. For now, all I can say is that the SME sector is doing really well. We are especially receiving good proposals from that sector. The new entrepreneurs coming out with their businesses are doing well. R DARE.CO.IN | BIO | AUGUST 2010 63

Wood-Plastic A CompositeA Future Business

n innovative entrepreneur setup temporary accommodation for pilgrims at Vaishno Devi. He called them 'temp homes' and offered it for rent in the peak season in winter. At the end of the season, after earning his money, he folded everything and went back home. The houses were made of a special composite material called Wood Plastic Composite (WPC). As the name suggests, WPC combines the properties of wood and plastic offering a highly durable and surprisingly malleable material. Builders, interior and exterior decorators and furniture manufacturers are embracing this magic material across India in a big way. Civic authorities are exploring ways of using WPC in parks and other public properties which should withstand the vagaries of both natural forces and human vandalism. Indian Railways too has shown interest in this composite. In an age, when science has successfully attempted to increase lifeexpectancy of man, man's own desire to to create super materials which can withstand extreme heat or cold and

Photo: KOMPOSiTE WOODiT

/Nimesh Sharma

AUGUST 2010 | OPPORTUNITY | DARE.CO.IN

"A WPC plant can be set up in 3-4 months with a capital of `5 crore, which will include plant, machinery, land, building, boilers, compressors etc." â&#x20AC;&#x201D; Dr S.N. Chakravarty

MD, KPS Consultants and Impex

WOOD-PLASTICS COMPOSITE IS MADE OF A combination of low cost cellulosic filler (60 to 70%) and recycled thermoplastics (30 to 40%). The cellulosic filler could be any form of wood by-products like chips, sawdust or cellulose from plants in form of rice husk etc. All the raw material is first processed into pellets which are further processed into WPC products of various forms, mixtures and sizes. Special coupling agents and additives are used in the manufacturing process to bind the raw material. The ideal size of wood to be used as raw material should be 40-80 mesh. These agents and additives are added in varying quantities, so that the WPC compound / product being made can be customised according to the weather which it will face and the durability desired in there. The climate in India varies after every few hundred kilometers, and so it has different effects on these products.

Market lies in climate affected zones Currently, in India, the market mainly exists for exterior furnishing. All the star hotels, restaurants, swimming pools and ﬁtness clubs use it for exterior decking and wall cladding. The furniture industry is increasingly using WPC for chairs and shelf elements. There is a huge scope for Wood Plastics in coastal areas, where exterior items degrade easily owing to extreme climate. WPC is touted as a good option as it is highly durable and requires least maintenance. Even places like Delhi having extreme climate can be a good market. "It is quite popular in the Middle-East and Australian markets," says Naveen TV, MD, Delta Build Pro, while telling us about the export possibilities.

Additives

CaCO3

Manufacturing Process Flow PE + Wood powder

yet can be elastic enough to mould it in various shapes has led to WPC. True to its form, WPC is resistant to moisture, rotting, cracking and splitting. It is highly durable and requires low maintenance. It is processed like plastic but behaves like wood. It can be manufactured out of scrap resources, hence is quite environment friendly. We interviewed Dr. S.N. Chakravarty, MD, and Mr. A Chakravarty, Jt MD, KPS Consultants & Impex, and other stakeholders of the industry, on what all constitutes this business opportunity and how it can be tapped by Indian SMEs and entrepreneurs.

Cost-wise, if wood costs `1, WPC costs about `1.5 and Thermoplastics cost `2-2.20. When compared with U-PVC (Unplasticized- PVC), MDF (Medium Density Fiber Board), and FJP (Finger jointed Pine), WPC is aesthetically better, resistant to moisture and more durable. Also, PVC does not give the appeal of wood, and is not recyclable more than once. From the manufacturer's perspective, "It's a 100 per cent clean business, with no by-products or pollution. In fact, it leads to recycling of plastic which could otherwise be very harmful to the environment," says Naveen. "The Mumbai ﬂoods in 2005 were caused due to the plastic bags choking the drains. This industry has the potential to avert such grave calamities ," says A Chakravarty.

See the scope & Start a WPC plant now

Ingredients

Mixing

Heating and cooling Mixer

Extrusion

Conical twin screws extruder and extrusion

Vacuum sizing and cooling

Vacuum sizing table

Towing and length cutting

Tractor and cutter

Unloading

Automatic unloader

WPE proﬁle

Why WPC, Why not Wood, Plastic or PVC? From the consumer perspective, the quest for minimal maintenance requirements, excellent weather ability and high resistance to wear and tear in construction applications is the reason WPC is preferred over others.

Presence of just 4-5 players pan-India shows the huge scope this industry has, according to both Naveen and SN Chakravarty. Some manufacture the raw material while others import from China and other countries and sell in India. Delta currently imports from Australia and Korea on order from a company called Komposite Woodit. It customizes the product according to customers' requirement. In India, there is no direct link between the manufacturers and the distributors, as their markets and procurement sources respectively, are different. So, a budding entrepreneur can go for either "import and customize" or "manufacture ﬁnished product" route. Alternatively, s/he can settle down to manufacture raw material since there is no big player doing it in India so far. In the case of Delta, they had studied the 20-year climate of several Indian cities with a market research extending to two years. Local climate is very important for customizing the WPC products. However, it would still DARE.CO.IN | OPPORTUNITY | AUGUST 2010 65

be not wise to step into this industry without advice of consultants as it requires very specialized knowledge. "Its difﬁcult to compete with Chinese companies as they have acquired big scale," says Rahul Jindal, Deckcrafts, which manufactures outdoor decking of WPC.

Investment, Raw Material / machinery and the Source The margin in WPC business is typically between 10 and 20 per cent and the raw material is easy to ﬁnd and cheap. According to Naveen, a `50 lakh machinery with 2 production lines can produce about 100,000 sq. ft. of WPC per month.

"It's a 100% clean business, with no byproducts or pollution. In fact, it leads to recycling of plastic which could otherwise be very harmful to the environment." — Naveen TV

MD, Delta Build Pro

VITAL STATS WPC manufacturers in India How eco-friendly is WPC plant Complete Cost of a WPC plant Time required to establish WPC plant Plastic generated in India pa Ideal life span of a WPC product No. of times WPC product can be recycled SN Chakravarty says, "A whole plant can be set up in 3-4 months in total from concept to planning stage to commencement of production, with a capital of `5 crore, which will include plant (Rs.2-3 crore), machinery, land (approx 3000-5000 sq ft), building, boilers, compressors etc. and it will yield a production of 5 tonnes per day. The raw material, at this capacity will cost about `2-3 lakh per day. The warehouse space requirement should be considered separately." Even though a warranty of 5 years can be given in after-sales-service, the consumer will recover the cost in 3 years itself. "The average sale price is `80-100 per kg, though it varies for different customers", says A Chakravarty. The raw materials include wood ﬂour/ saw dust/ agricultural waste like rice husk, cotton plant stalk powder, bagasse, bamboo etc. and scrap/ recycled thermoplastics like HDPE, PP, PVC, etc. However rice husk is not recommended to be used in exterior items as it causes drying of the prod-

RAW MATERIAL & USES (CURRENT AND FUTURE) What goes in WPC?

What comes out as WPC?

Wood Flour, Wood Chips, Saw Dust, Rice Husk, Cotton Plant Stalk Powder, Bagasse, Bamboo, Scrap/ Recycled ThermoplasticsHDPE, PP, PVC

Outdoor Floor Decking, Railings (In Staircase), Fences, Park Benches, Rooﬁng/ Sheds, Portable Cabins, Pallets, Window & Door Frames, Indoor Panels, Furniture, Flooring, Staircase, Highway Construction, Railway Sleepers, Play Areas, Portable Toilets, Temp Housing, Prefab Housing, Playground Equipment, Site & Leisure Furniture, Insulation And Finish Systems, Gardens, Chicken Coops, Automotive Industry, Building & Construction

AUGUST 2010 | OPPORTUNITY | DARE.CO.IN

4-5 max 100% Rs 5 crore 3-4 months > 2 million tons 25 years 5 times uct and degrades faster. On the other hand, if used in excess of 20 per cent in total composition of the product, it is eligible for a waiver on excise duty as it's an agricultural product. In India, manufacturers face irregular supply of raw materials from unorganised market unlike Australia, where the market is organized and there are different companies manufacturing raw material and ﬁnished product. The government can help in this by establishing dedicated scrap collection centers in various cities for wood and plastic scrap, especially near plastic production and recycling belts. Unless one can ensure constant supply of raw material to the plant, it would be naive to start the plant. The machinery has to be imported from USA, Germany, China or S.Korea because WPC requires special extruders because wood, unlike plastic, scratches and degrades metal machinery overtime wile being processed.

Explore the huge future The industry is still very much unexplored in India. The big plastic players are looking to tap this business opportunity. Besides, few ﬁrms like Delta are trying to organise this industry by developing industry focused website. So, one can imagine the inﬁnite possibilities. Some enterprising people have also explored uses of WPC in solving India's sanitation and housing problems. Yet the market is in its infancy and offers good opportunities to entrepreneurs. R

blogs/opinion

/Dr Hrishikesh Damle

Advanced Technologies in Medicine Medicine is becoming more instrument-friendly, thanks to several innovative medical instruments...a market waiting to be tapped

ave you heard of Belgian Mellinoise? The term refers to a breed of shepherd dogs found in Europe. This is not about their bones being used in Chinese medicine. This breed is one of the few breeds found efﬁcient in snifﬁng cancer, especially prostrate cancer. In fact, if we were to go by the study conducted by a hospital in Paris, the dogs could identify the presence of prostrate cancer in 63 out of 66 urine samples of patients. It may not be a bad idea to open a kennel and start breeding these dogs, considering the prevalence and outcome of prostrate cancer. Here go the statistics: Prostrate cancer is the second biggest killer among cancers in men. Every one out of six individuals risks prostrate cancer. If you are in USA there is more disheartening news. Every year more than two lakh new prostrate cancer cases are diagnosed with 32,000 deaths. Thank heavens, it is not as prevalent in India. So what’s the future plan of these scientists from Paris? Take an IPR on the breed and start kennels across the world? Will we encounter sniffer dogs in laboratories in the near future? No, those clever guys know that, that’s not the way to go. Depending on a living organism to achieve a task will be expensive, inaccurate and impractical. Like manpower, ‘dog power’ would be an issue in the laboratory business. So what’s the right way then? 68

AUGUST 2010 | COLUMN | DARE.CO.IN

Scientists are planning to first identify the chemicals that dogs are sniffing and subsequently develop a chemical kit to determine their presence in a given sample. Alternatively, they are also trying to develop an “electronic nose” which can accurately discover prostrate cancer. It would be worth knowing a bit more about the electronic nose. Electronic nose is a device developed based on the principles of olfactory apparatus of our nose. There are sensors in the device which react to volatile substances in the sample and generate specific data which is analyzed by a computer. Developing an electronic nose will be easier to replicate, distribute and implement in laboratories. It will also be faster, cheaper and able to assess many samples without getting sick or going off mood. Human body is a very complex mobile machine which lives and delivers. So are animals and birds. Each of these have evolved systems and functions, with similar or entirely different mechanisms of function rendering them superior or inferior to other living beings. If humans have much higher levels of brain functions with the abilities to perform complex tasks like driving a car; birds like eagles, kites have much finer visual ability suitable for their living. A snake can identify a moving rat at night through heat sensors; bat’s locomotion is facilitated by sonar system. Though human being is equipped by amazing

units for perception and analysis, few of them are faulty. For example, human eye is a poor instrument attached to a highly sophisticated analytical visual system in the brain. The very reason we wear spectacles is due to the inability of our eye to properly create sharp images on our retina. Similarly ears loose their ability with age and quite often the nose cannot identify the odour with closed eyes. Thus, perception of human body fails to retain accuracy unlike man-made machines which can be calibrated for a standard output from time to time. The point is, though we are blessed with complex systems and functions, they are good enough only for tasks necessary for survival. We need more accurate tools, accurate in perception, analysis and reporting various type of critical information. This gap is ﬁlled by technology, despite not rhyming well with the paradigm of life, when applied in medical care, that has increased our life span by many years. If we look at the history of medicine, Indian medical systems embraced more humane aspects of medicine and developed philosophical algorithms and human skills in identifying and treating diseases. The west surrendered completely to technology. The technology along with structured scientiﬁc methods provided more mechanical accuracy and reduced humane errors. Today, hospitals are loaded with equip-

ment for every task like diagnosis, treatment and life support. Every medicine is manufactured, stored, transported and administered using latest technologies. Apart from those advanced technologies like MRI (which has a magnet several hundred times stronger than the earth itself), dialysis machine, and ventilators among others which have started sounding mundane due to their common presence and familiarity, some fascinating new ones are emerging to ignite our enthusiasm. “Capsule endoscope” is one such equipment which can mesmerize our wits. We all know that our food pipe, which starts at our throat passes through several meters taking various shapes and folds before reaching the rectum. The upper or lower portions are accessible (though some with difficulty) for examination due to their proximity to the orifices. Small intestine is the convoluted tube which is farthest from both orifices making it inaccessible for simple endoscope. The latest answer for this problem is a “capsule endoscope” which is nothing but a tiny camera of size 2.6 cm long and 1.1 cm wide. Once swallowed this capsule takes two snaps every second while continuously traveling through our gastrointestinal tract. These images are immediately transmitted to a receiver worn by the patient. The battery lasts around eight hours giving an average of 55,000 images of the inside of intestines, which were never accessible to us without cutting across the abdomen! In the end the patient returns the receiver and the capsule which is expelled with the stools. This discovery is found to be very useful in identifying bleeding in small intestines and other disorders with much more precision. Soon we would be able to control the movement of the capsule and remotely monitor the camera enabling wider application. The list of latest technologies in medicine will run pages. To compile such a list would call for a book with yearly editions, having significant

Thinking out of the box, few ingenious inventions have headed to make use of the unique characters and composition of our body for other utilities

number of new entries in each. Most of such inventions involve complex technical workup in diagnosis or treatment while few are amusing. Researchers have now developed contact lenses which change their color according to the level of sugar in the blood. So next time you suddenly see your aunt’s black eyes turning blue, remind her about her insulin shot. Synthetic blood, synthetic organs, a new quick fix cement to join bones, lab-grown skin are efforts to improve our survival. Thinking out of the box, few ingenious inventions have headed to make use of the unique characters and composition of our body for other utilities. One such invention is a cell phone which can identify the owner! Every individual ear has acoustic fingerprints, which means every ear has distinctive sounds in the ear chamber. A cell phone has been devised, which when brought near the ear will scan the ear and identify whether the user is the right owner. It can probably switch off and send signals of location helping its master to find his lost phone. Talking of cell phones, we will find cell phones to be our pocket doctors in assisting us to identify health problems. Pulse, blood pressures and blood sugar analyzers could probably be attached to the cell phone with ease. A valiant effort to attach a microscope which can identify diseases like malaria and tuberculosis from blood samples has been fairly successful, bringing cheer to many Af-

rican countries afflicted by these diseases. The invention is very significant considering the poor healthcare facilities in those countries. The technology can see, analyze, compute and store with an incredible accuracy which is beyond human ability. In fact, technology is revolutionizing the very aspect of human vision. Bionic eye is the latest hope for the blind. A bionic eye consists of basically three units. First unit is a camera that is mounted on the spectacles. The camera creates images from every perspective of the person wearing the spectacles. The image created by the camera is sent to the second unit which is a signal processor, placed in the patient’s pocket. This unit converts the image created by the camera into a form of signal which is understood by our brain. The third unit that is surgically implanted inside the retina receives these signals through wireless transmission. This unit is capable of receiving the signals from the processor in the pocket and transfer the same to optic nerve (nerve of the eye), which carries them to the brain. At present this device has succeeded only in creating crude images, just sufficient in helping a blind person to move around. We can expect improvements in this device with abilities to provide better quality images in future. If you wish to nurture the frenzy of thought, imagine the processor being preprogrammed to edit and transmit altered images with few calculations! I am leaving the alterations which can be made to your imagination with few examples. Change tones, convert to black and white, crop image, zoom on a particular part, improve contrast, cut and paste, and blur few parts…. etc. What a vision? R Dr. Hrishikesh Damle is a first generation entrepreneur. He is CEO of Atrimed, a pharmaceutical company. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Dr. Hrishikesh Damle'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | AUGUST 2010 69

Ask the Investor

/Pavan Krishnamurthy

Would investors look at a large PSU project having a 5 year IPO aim? As long as the opportunity is good and offers a compelling solution to a well recognized pain point and offers the potential to scale fast, investors may consider such opportunities

nterprise Product Company wanting to raise VC/PE Investment. Akshay Shah: We are a four-year-old established ERP, SaaS, PaaS Web 2.5 Enterprise Product company having ERP, CRM, SCM, HRMS, Payroll, Finance, Quality Management, Production and Production Planning Modules and over 25 customers across India. We are now at the crossroads of expansion and scaling up our business. What are our options in terms of raising venture capital and PE investment?

VC’s typically invest larger amounts of capital in a business that can be scaled faster 70

AUGUST 2010 | ASK THE INVESTOR | DARE.CO.IN

Pavan: VC’s will consider only those companies that are operating in a competitive vacuum or companies that have demonstrated a compelling value proposition in a reasonable big market. If you are operating in a well established and mature market like ERP which has a number of

players, you would need to demonstrate a superior and compelling value proposition relative to the competition. From the various domains/products that you have described, pick one that looks promising relative to the rest, build a business case and then you could approach VC’s. Investors required for a booming business Sharat Sharma: I am looking for investors willing to invest about `50,00,000/- in an auto business being run by me for the past four years. We have been in the automobile business for the past 80 years, I being the third generation. The investment is in liquid capital goods (stocks), the investment is safe as the goods can be liquidated in a very short time frame to raise the entire amount invested. What is the next step I need to take in attracting an investor?

Pavan: VC’s typically invest larger amounts of capital in a business that can be scaled faster. INR 50 lakhs is a small amount for any VC to consider. In this context, perhaps it is best that you tap into a network of high net worth individuals or angels or if the cash ﬂows are good and stable, even debt ﬁnancing from banks could be an option. Seeking funding for tech startup Omprakash Visvanathan: Seeking funding for tech startup with fully built product in hand. Product is niche, feature-rich with huge market size ready to be tapped. I am hoping to raise one to two crores to launch the product. How would venture capitalisst evaluate my case? Pavan: VC’s would evaluate the idea based on the market potential, pain point proposed to be addressed by the solution and the evidence that the product is offering a real and compelling value to the customers. In addition, the nature and composition of the founding team and the customer traction are also very key evaluation metrics. Want to meet potential investors for a concept on rural healthcare Dr. Sanjay Sharma: I have a concept on remote healthcare services—an end-to-end healthcare delivery system for the developing world. Can you help me by elucidating the steps I need to take for raising angel funding to kick off the pilot project? Pavan: First step is to establish the fact that the product once built is solving a real pain or need in the market. This can be done through market engagements in the form of talking to potential customers/users, industry

First, establish the fact that the product once built is solving a real pain or need in the market, then create a business plan explaining the opportunity and the outcome expected from angel funding

or domain experts and the relevant eco-system players. Once this is done, a brief business plan explaining the opportunity and the outcome expected from angel funding would need to be created and shared with angels who are interested in this space. Pavan: It would depend on the speciﬁcs of the deal and would vary from investor to investor. As long as the opportunity is good and offers a compelling solution to a well recognized pain point and offers the potential to scale fast, investors may consider such opportunities. R

Looking for advice on VC/PE/ Angel / Seed Funding for your entrepreneurial project. Send your queries to Pavan by sending an email to dare@cybermedia.co.in with the subject line 'Ask the Investor'.

Pavan has over 15 years experience across various industries such as early stage investing, consulting, venture advisory, research etc. In the recent past, he has worked with Nadathur Holdings and Investments (an early stage venture capital firm focused on technology and life sciences ventures), SRW Advisors (an advisory and mentor capital firm that worked with entrepreneurial ventures in areas such as strategy, business model/plan development, finance, mentoring etc) and Syndicated Research Group (a US-based research advisory firm that provided research advisory services to senior executives of Fortune 500 companies in the domains of human capital strategies and corporate finance strategies). DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's.

DARE.CO.IN | ASK THE INVESTOR | AUGUST 2010 71

The G-20 SME Finance Challenge Global community echoes SME funding woes and launches a ďŹ nance competition with focus on innovative solutions for the world /Nimesh Sharma

AUGUST 2010 | XX X XXXXXX | DARE.CO.IN

n the last DARE issue, we had covered how SMEs are often too small to attract commercial bank or investor interest but too large to benefit from microfinance products. In fact, only an estimated 20 percent of small firms in low-income countries have access to credit. To counter the same issue on a global level, The Group of 20 and Ashoka’s Changemakers, with support from the Rockefeller Foundation, have launched an online competition to find the best models worldwide

The G-20 and Ashoka’s Changemakers invite entries before August 25, 2010 at www.changemakers.com/SME-Finance.

Details on guidelines and criteria for the proposals can be found on the aforementioned website.

for public-private partnerships that catalyze finance for SMEs. The G-20 SME Finance Challenge is the first ever competition launched by the G-20 and is a unique financial inclusion effort aimed at giving small entrepreneurs a chance to grow their businesses. At the Pittsburgh Summit, the G20 had created the Financial Inclusion Experts Group (FIEG) to expand access to financial services, including credit, to the poor. The United States, Canada, and Korea co-chair the FIEG. At the G-20 Business Summit (B-20), Canadian Prime Minister Stephen Harper announced the competition and pledged $20m from Canada to scale up the winning solutions. “Small and medium enterprises are the single largest contributor to employment and job creation, in Canada and around the world,” said Prime Minister Harper. To implement the winning proposals from development banks and interested bilateral donors, the G20 has committed to mobilizing the public share of the funding needed. Various development finance institutions like IFC, the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank, OPIC and the European Bank for Reconstruction and Development have indicated their support for implementing scalable and sustainable proposals in partnership with the private sector. Through the G-20 SME Challenge, the private financial institutions, investors, companies, foundations and civil society organizations have been asked to identify path-breaking models that will make public programs more effective in obtaining private finance. “By identifying the best financial solutions to support SMEs, the G-20 is playing a critical role in the global fight to create jobs and reduce poverty,” said Rockefeller president Judith Rodin.

Those proposals that best meet the criteria of innovation, leverage, social and economic impact, sustainability, and soundness will be the winners of the Challenge. Entries shall be judged by a panel of five independent experts and three G-20 representatives. Up to 15 entries will be selected as winners representing all regions (Africa, East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, and South Asia) . They will be invited to the November 2010 G-20 Summit in Seoul, Korea to be recognized for their innovative ideas, and to enable them access a pool of public finance mobilized by the G-20. “We are expecting a lot of participation from India. This competition is being seen as a major step forward in taking effective solutions to the promotion and support of SME segments globally,” says Manoj Chandran, Director – Marketing, Ashoka India. Aftwerwards, the winners will then be connected with donors and investors at an SME conference in Germany. The form of funding available will depend upon the requirements of winning entries and may include grants for technical assistance or capacity-building for financial institutions, risk sharing or first-loss capital, mezzanine capital, or investment capital. “Ashoka attracts a marketplace for innovation,” said Diana Wells, Ashoka’s President. “We believe that there are a host of unknown brilliant ideas that are providing critical financial support to the best small companies that are changing the world. The G-20 and Ashoka’s Changemakers are committed to finding them and bringing them to the world’s attention.” If there are more of such competitions which raise funding for SMEs solving social problems, we can surely hope that the problems of the world may come to an end. R DARE.CO.IN | CONTEST | AUGUST 2010 73

Startup Saturday kick-starts a million thoughts! With entrepreneurs in Mumbai and Pune discussing software products versus services, Kolkata seeing IT insights, Delhi interacting with the Morpheus guys and Bangalore having a thought-provoking talk by IIM-B faculty, Startup Saturday is surely becoming a phenomenon

f you plan to visit an entrepreneur on a Saturday, make sure it’s not the second Saturday of the month because that particular sub-human species is to be found at a gathering called Startup Saturday. Its flag has been planted in seven cities and here is a roundup on five of them. Mumbai decided to pursue a topic quite close to its heart — Jugaadu entrepreneurs. It targeted people who have ventured right from the grassroots by starting their workshops, factories, galas or work even from their chawls. The idea was to highlight that genre of entrepreneurs whose ‘offline’ businesses are never mentioned by today’s media and not considered equally cool by the younger generation. The first half of the session had showcases by Sandeep Jain, the founder of Aadish International Machines and Omprakash Mantry of Century Inks. Both these entrepreneurs run their own unique printing ventures that cater to a very specific niche. Sandeep on one hand provides printing solution on any surface apart from paper, Omprakash manufactures printing products that can be used to mark clothes while processing. Both the ventures were laser-focused and knew their target markets. The meetup was graced by Prof. Victor Manickam, a marketing research analyst and a celebrity in the Mumbai circles, who gave a practical and eye-opening lecture on the myths

AUGUST 2010 | EVENT | DARE.CO.IN

people carry while venturing and how it results into a startup failure. The last part of the session had Amol Mestry from Amol Houseware who showcased his latest innovation, the Nano Kitchen from amongst many. Another pitch was given by Gayatri Hegde and Ramya Raghuram who are trying to organize the Kabadiwalas for a proper waste-management solution for metros. Overall the session was quite unique and exciting, with high energy levels in the networking session. Pune was an open house discussion on “Software products V/s services” which was a great discussion well received. Shirish Deodhar, author of “From entrepreneurs to Leaders’ (on the same subject) brought out several moot points and advised that Indian startups shouldn’t crib much about products and services as long as they are making some good money. Kolkata started off with a very insightful session on “IT Law”. It particularly emphasized on how an early stage startup can strategize on minimizing risk and maximizing growth. Shannon Jhunjhunwala, a New York state attorney with extensive experience in legal aspects of outsourcing, IT law and eCommerce law shared valuable insights on how IT services and web-based businesses can cater to the Western markets. Some of the topics addressed were: • Creating a viable business and its growth plan

• Drafting agreements that protect your interests and limit your liability • Protecting your IP domestically and internationally • Personnel policies relating to noncompetes and conﬁdentiality Sumit Datta presented Forums. com - a single point platform to create, share and propagate your thoughts and critiques. A very lively open house followed with the entrepreneurs engaging in interesting questions and business pitches. Open house, dear readers is a recent concept at a Startup Saturday and involves the audience running the show on a particular topic. The audience at the events are not only the consumers but extremely capable individuals on the intellectual plane to equally deliver insights on any topic pertaining to entrepreneurship. After a mention in TechCrunch.com last month, Delhi saw a record number of registrations. There was a product demo of RadBox and insights on online video market and technology by Aditya Sahay. Sameer and Nandini from The Morpheus gave an inspiring talk sharing their story of Madhouse Media, quoting several insightful anecdotes - from taking on entrepreneurship accidentally to working long hours, maverick sales strategies, blind faith, getting acquired and following your bliss. Delhi had an Open House format this time after its huge success in Mum-

bai and Kolkata before. Several entrepreneurs asked questions to resolve some of their business challenges. Bangalore started with a demo by ReachAccountant.com which helps businesses keep their accounts in place through their online application. It was followed by a thoughtprovoking talk by Prof Suresh Bhagawatula, a visiting faculty at IIM-B and a researcher on entrepreneurship. He shared insights on how businesses are formed not in a planned manner but often through exploring new opportunities through multiple statistics and examples that most of the successful entrepreneurs just followed the opportunities without a big plan in mind; and struck success. His clear message was - don’t spend too much time on business planning, instead go out there and do it, to be successful. The energetic talk elicited a chain of questions keeping the tempo high in the room. A set of startups gave their lightening pitches using the 5 quick minutes to present their ideas. Freeman Murray talked about Jaaga, a creative place for entrepreneurs to bootstrap their ideas; Manish spoke about Ghoshti and Satish presented his company Cybrilla Technologies. Overall it was a high energy evening with loads of learning to take back. Summing up, Startup Saturday promises to kick start your thoughts in directions hitherto unexplored; it connects you to passionate individuals with probably nothing more than an idea. But an idea sirjee is a powerful force, once planted it grows-–it takes you and your country to heights that reason alone cannot fathom… R Startup Saturday is an initiative by HeadStart to provide entrepreneurs in each city with a monthly community driven forum that is structured in agenda but open in discussions. A Startup Saturday provides a forum for entrepreneurs to discuss, present, network and learn from peers, prospective customers, adopters, partners and investors. Currently SSs are held in Bangalore, Delhi, Hyderabad, Pune, Kolkata, and Mumbai, on the second saturday of every month. http:// headstart.in/ Inputs from Amit (Bangalore), Ritesh (Delhi), Arpit (Pune), Mitesh (Kolkata) and Saptarshi (Mumbai) DARE.CO.IN | EVENT | AUGUST 2010 75

Statistics Private Equity /Venture Capital in June 2010

PE Investments (Trailing ďŹ ve years) Investments in H1 (Jan-Jun) Amount

No. of Deals

8000

300

PE investments No. of Deals

Amount (US$ M)

June 2010

878

June 2009

391

SOURCE: Venture Intelligence PE/VC Deal Database

250 6000

US$ Millions

Year

200 4000

150 100

2000 50 0

2006

2007

2008

2009

2010

VC Investments (Trailing Five Years) Investments in H1 (Jan-Jun) Amount

No. of Deals

500

VC investments* No. of Deals

Amount (US$ M)

June 2010

June 2009

* VC investments are a subset of PE SOURCE: Venture Intelligence PE/VC Deal Database

400 60

US$ Millions

Year

300 40 200 20

100

PE Investments by Stage for H1 2010 Stage

No. of Deals

Amt (US$M)

Venture Capital

249

Growth-PE

1231

Late Stage PIPE Pre-IPO

48 15 0

1708 356 0

Buyout

Other

973

2006

2007

2008

AUGUST 2010 | STATISTICS | DARE.CO.IN

2010

PE Investments by Stage for H1 2010 by Volume 3%

32%

Venture Capital

2009

Growth-PE

11%

Late Stage PIPE

12%

35%

Pre-IPO Buyout Other

Industry

Investors

Amount ( $ M )

Tata Power

Power

Olympus Capital

300

Tikona Digital Networks

Broadband

Undisclosed

150

GMR Energy

Power

IDFC PE, Argonaut, Ascent Capital, Others

100

Metropolis Healthcare

Diagnostics

Warburg Pincus

85 Top PE Investments in June 2010

Top VC Investments in June 2010 Company

Industry

Investors

Amount ( $ M )

Taggle

Online Services (Group Buying)

Battery Ventures, Greylock Partners

8.75

Centum Learning

Higher Education

MayďŹ eld

8.7

D Light Design

Alternative Energy (Devices)

DFJ, Acumen Fund, Omidyar Network, Gray Ghost Ventures, Nexus Ventures ,Others

5.5

Jivox

Online Services (Video Advertising)

Helion Ventures, Others

4 Top PE Investments in June 2010

PRIVATE EQUITY

Company

VENTURE CAPITAL

Top PE Investments in June 2010

VC Investments by Stage for H1 2010 by Volume VC investments by Stage for H1 2010 44%

State

No. of Deals

Amount (US$ M)

Early

103

Growth

147

Early

56% Growth

DATA SOURCE: DARE.CO.IN | STATISTICS | AUGUST 2010 77

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Back of the Book

On The Bookshelf /Shradha Mohanty

Reach For The Skies Richard Branson talks about the pioneers in the aviation industry, and the history of ﬂight, in his recent book Reach For The Skies. He describes many path- and record-breaking events, including stories from his personal life. Author: Richard Branson Publisher: Virgin Books Price: Rs 599

Eat That Frog! Self help author Brian Tracy tells us how to deal with procrastination and manage tasks effectively in Eat That Frog! Explaining that successful people do not try to do everything, and instead prioritize, he shows how to set everyday goals and stick to them. Author: Brian Tracy Publisher: Tata Mc Graw-Hill Price: Rs 150

The Second Gear Stategizing Business Growth Plan for Micro Entrepreneurs A to-the-point and easy-to-understand book for the new entrepreneur. G.K. Pramod’s ‘the second gear’ provides strategic inputs in the form of bullet points, backed by numerous case studies making it an easy read for anybody who wants to quickly grasp the basic concepts of running a business. The ﬁrst generation entrepreneur in his book hopes to share his knowledge to help the Micro Entrepreneurial community grow. The various sections of the book comprises an overview of business growth programmes for Micro level Entrepreneurs and also how to design your own growth strategy. It also addresses the challenges one is likely to face when starting a venture. The book is simplistic in approach and at the same time it stresses on details of every kind in a business. For example: It explains the SWOT analysis and Vision statement of Micro level Enterprises with plenty of examples. In this way the entrepreneur can get an idea on how he wants to do the same with his business.

Go Kiss The World Subroto Bagchi, currently the vice chairman and ‘gardener’ of technology company MindTree, takes us on a journey through his life in Go Kiss The World. The book gives inspiration to young professionals and entrepreneurs alike, being the story of a young boy who grew up in a small town and went on to achieve great things. Author: Subroto Bagchi Publisher: Penguin Books India Price: Rs 399

AUGUST 2010 | BACK OF THE BOOK | DARE.CO.IN

Gadget Shop

Get Smart What does your business card say about you? A business card says more than where you work and how someone can contact you. It sends a subliminal message about who you really are, and if you ignore this, you might be sending out a highly undesirable message to your contacts. Here are a few things you need to keep in mind.

Photo: philips.com

Plug-in speakers The Philips notebook USB speakers can be used as clip-ons or stand-alones. They work with both MAC and PC, and do not need a battery or adapter.

MP3 player with voice recording The Pendulum Swing is iBall's high quality MP3 player that comes with a built-in FM radio, FM recording and voice recording, and also works as a USB ﬂash drive.

Interactive whiteboard Panasonic's UB-T780 is a 77-inch screen, which comes with an electronic pen and durable surface. The interactive whiteboard works on USB 2.0 interface.

Photo: motorola.com

Cargo Jacket: The Burton Audex Motorola Cargo Jacket comes with a control panel for making calls, listening to music, and is waterproof as well. Along with Ventilating Pit Zips and thermocore insulation it has a full time contour hood. It also allows hands-free wireless communication up to 30 feet from a Bluetooth enabled phone. All this comes at a one year warranty from the manufacturer.

Give all the information: First things first, your business cards should give out all the information that a person needs about you, where you work, in what capacity and contact information, including telephone/fax number, e-mail and website. Don’t be cheap: People are usually put off by cards printed on flimsy paper, which shout “I didn’t want to waste too much money on quality paper for my cards.” It also tells people you don’t care and that is not the first impression you want to give. Correct the typos: You just got your brilliantly designed and printed cards, but suddenly see that there is a spelling mistake somewhere. Invest a little more money and get a new batch of cards printed. There is nothing more turning off than a typo on a card. Keep it simple: Don't overcrowd your card with too much information. Unfortunately there is a thin line between giving all the required information and giving too much information. Remember that people would generally want to write on your card, so leave plenty of white space. Be unique: Randomly pick out 10 business cards of others and see which ones make a lasting impression on you. There is most likely something unique about the cards you pick. Make sure that there is something on your cards that people will remember you for, to create a lasting impression. Elements: Make proper use of elements like colour, paper quality, typography and feel. All of these send across a message about you.

DARE.CO.IN | BACK OF THE BOOK | AUGUST 2010 81

Travel Bug

Wildflower Hall, Mashobra Nestled in the laps of the Himalayas, the Wildflower Hall was once the grand colonial residence of the British Commander-in-Chief Lord Kitchener. Set in 23 untouched-acres of cedar and pine, the luxury resort and spa offers unparalleled views of the majestic Himalayan peaks from wherever you look. Recreating the opulence of times past, with teakwood floors and hand-knotted rugs, the Wildflower is a perfect destination to get away from a hectic city life. Packages offered at the spa include ayurvedic treatments, therapies based on the five elements, skin and nail care, and specialty baths like a neem purifying bath amongst a host of others.

Devigarh Palace, Delwara An 18th century fort palace, with 39 regal, yet minimalistic suites, the Devigarh Palace sits in the laps of the Aravali Hills near the village of Delwara. Twenty-eight kilometers from the city of Udaipur, the palace was immortalized on the silver screen in the 2007 ﬁlm, Eklavya: The Royal Guard. Semi-precious stones like lapis lazuli and malachite make colourful patterns on the walls of some suites, giving a distinctive look and feel. You can also choose a suite with its own swimming pool and Jacuzzi; that is if you are not tempted by the main pool on a green slated terrace, which offers gorgeous views of the surrounding hills.

1. Always be genuine. People can generally see through a fake exterior.

tips for successful business networking

2. Keep several interesting conversation topics in the back of your mind for awkward pauses. But don't use them in the middle of another conversation or you will come across as disinterested in what other people are saying. 3. Be clear about your work and why you do it. This will establish you as an expert in your field and a clear-headed individual. 4. You should always know in what ways others can help you out. That way you have a ready answer when someone asks how they may be of help to you. 5. If you meet someone who can benefit from what you do, always take the initiative to call them and offer help. 6. Remember that people have a tendency to find stories interesting. A good way to make a great first impression is to have a funny story at hand of how you are in your current line of work. 7. Give unexpected answers to mundane questions like, "How are you?" People expect a "fine, thank you" but give them something a little more interesting and you have a conversation starter plus a memorable first impression. 8. Watch your body language. The last thing you want to do is stand with your arms crossed. 9. Always carry your business cards; you never know when you might need them. 10. Always listen to what people are saying, don't just pretend to listen. It's always a good idea to ask a follow-up question, as it tells the other person you are interested in him/her.

AUGUST 2010 | BACK OF THE BOOK | DARE.CO.IN

blogs/opinion

/Rajaram Rajendran

Small Things Matter There is nothing new or special in this article

We all love small surprises, they make the day better

silly company t-shirt or even a simple coffee mug matters. Small and simple things, just like anything else in life, matter a lot in a small business. Now, do not read what’s not written. Of course workflow, recruitment, people, projects and clientele matter. Serious meetings, busy people, highend computers and comfortable chairs are always there. But sometimes these might not create that small level of excitement or enthusiasm needed for that charged environment. One funny ringtone might. One of us found a hand-painted circus poster and brought it to office. Visitors and clients found it hilarious. My partner downloaded a new game on his phone the same day. It was a simple but awesomely engaging game; everyone took turns in playing it between work. This did not affect the projects in any way but the overall enthusiasm and energy at the workplace seemed a lot different. In a good way. We have a small graffiti wall and we just keep painting whatever we feel like. The result never turns out ‘wonderful’, but it’s fun. A lot of companies allow pets inside the office. Works the same way. One funny poster makes a lot of difference to an everyday meeting in the conference room. Surprise wall-

papers on computers make a good laugh at the start of the day. We all love small surprises, they make the day better. Try sitting on the floor for an otherwise, regular and boring project meeting. Things are informal all of a sudden. Add small cups of coffee. The whole conversation might go better. Even funny signs on bathroom doors really make a difference or even some random post-its on computer screens. A hectic project goes way smoother if the overall feel is fun and these things make it happen. We’ve a dog in the studio now. Heck, it’s even on our website and a cycle and new games to play. Music is louder towards the end of the day. No matter how intense the projects are, these small things make work hours fun. The funny part is, we all know these. But often under client pressure and the process drill of project management, we tend to forget these simple things. Have fun. :) R

The writer is an entrepreneur, designer, digital artist, wannabe musician and a jack of all, who thinks black & white photography is very cool. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Rajaram Rajendran'. DISCLAIMER: The views expressed here are that of the author and do not represent the magazine's. DARE.CO.IN | COLUMN | AUGUST 2010 83

Organizations DARE.CO.IN

covered in this issue, in alphabetic order; ﬁrst appearance

Aadish International Machines ........74

Deccan Airlines................................58

KITVEN Funds.................................62

Reserve Bank of India .....................43

Acumen Fund ..................................89

Dynasty Resorts ..............................48

kozmo.com ......................................51

Resonance Media............................51

African Development Bank ..............73

Eklavya ............................................82

Linux ................................................57

RIAA ................................................34

Almond Roca ...................................34

Elitecore...........................................60

Madhouse Media .............................74

Rockefeller .......................................73

Apple ...............................................33

Engineering Exports Promotion Council (EEPC) ..............31

Maharashtra State Chairman of Builders Association of India .......31

Rockefeller Foundation ....................73

EnterpriseDB ...................................61

Meter Down .....................................24

Epicurus...........................................27

Michael and Susan Dell Foundation ...............................88

Ashok Alexander .............................88 Ashoka India ....................................73 Asian Development Bank ................73 Aspect Development, Inc .................89 Atrimed ............................................69

European Bank for Reconstruction and Development.............................73

MindTree ..........................................80 Morgan Stanley ...............................88

SKG .................................................51 Sobieski Vodka ................................51 SourceForge ....................................56 SRW Advisors .................................71 State Coordinator, Builders Association of India (BAI) ................30

Export Credit Guarantee Corporation (ECGC) ........................41

Motorola...........................................81

Bata Shoes ......................................33

Financial Inclusion Experts Group (FIEG) .....................73

Nadathur Holdings and Investments ..............................71

BBX .................................................49

Fitch .................................................42

Syndicated Research Group ...........71

Belvedere ........................................51

National Entrepreneurship Network ...........................................88

Forums.com.....................................74

Beneﬁt Barter ..................................49

NBC Universal .................................51

Talent Advisory Services .................88

G Autos............................................26

Bharat Bhari Udyog Nigam Limited..................................31

Net4barter .......................................49

Tata Mc Graw-Hill ............................80

G-20.................................................73 News Corp .......................................51

TechCrunch.com..............................74

Nokia ...............................................47

The Flag Company ..........................39

NRCFOSS .......................................60

The Group of 20 ..............................73

Axis Bank.........................................41 BarterBiz..........................................49

Symphony Services .........................88 Symphony Technology group ..........88

Github ..............................................56 Bill and Melinda Gates Foundation ............................88

GiveIndia Foundation.......................88

Bureau of Indian Standard...............39

Goldcorp ..........................................47

C-DAC .............................................60

Google .............................................47

Cadbury ...........................................34

Hero Cycles .....................................33

Omidyar Network India Advisors ..................................88

CARE...............................................42

iBall ..................................................81

Oneuptrade......................................49

Carnegie Mellon University..............89

ICICI Bank .......................................30

OPIC ................................................73

Twitter ..............................................33

Century Inks ....................................74

ICRA ................................................42

Optima Watches ..............................49

UC Berkeley ....................................46

CIBIL (Credit Information Bureau [India] Ltd.) ..........................42

ideaken ............................................47

Oracle ..............................................61

United Airlines .................................33

IFC ...................................................73

Ormita Commerce Network .............49

United Nations .................................43

Cisco................................................30

IIT Bombay ......................................89

Ormita India .....................................50

Universal Studios Home Video ........51

Clinton Foundation ..........................88

IIT Kanpur ........................................25

P&G .................................................47

Compact Hometel ............................52

Indian Council for Research on International Economic Relations..........................................43

Panasonic ........................................81

University of California in Berkeley .......................................61

Inter-American Development Bank ..........................73

Philips ..............................................81

Credit Guarantee Fund Trust For Micro And Small Enterprises (CGTMSE) .........41 CRISIL .............................................42 CS India Steel Pvt Ltd .....................58 Cybrilla Technologies .......................75 Dairy Milk.........................................34

Odyssey Tours .................................58

Inter-American Development Bank Group .....................................73 IT4enterprise.com ...........................58

DARE ...............................................30

Karnataka Khadi Gramdoyog Samyuktha Sangha .........................39

Dasra ...............................................88

Khadi Bhandars ...............................39

AUGUST 2010 | INDEX | DARE.CO.IN

Penguin Books India ........................80

Proto.in ............................................21 Purushottam ....................................39

The Morpheus .................................74 Tradex ..............................................49 Twentieth Century Fox .....................51

Vidarbha Industries Association (VIA) .............................31 Virgin Books ....................................80 Wadhwani Foundation .....................88

RadBox ............................................74

Walt Disney......................................51

Random Loops ................................59

Windows ..........................................57

ReachAccountant.com ....................75

World Bank ......................................73

RedHat ............................................58

Zoho ................................................20

People DARE.CO.IN

covered in this issue, in alphabetic order; ﬁrst appearance

A.R. Jayakumar ...............................62

Dr. Hrishikesh Damle .......................68

Neeraj Mishra ..................................31

Romesh Wadhwani ..........................88

Abhay Garde ...................................31

Freeman Murray ..............................75

Nirmal Kumar...................................26

S V Somanati ...................................39

Abhilash Sonwane ...........................60

G.K. Pramod ....................................80

Omprakash Mantry ..........................74

Sandeep Jain...................................74

Aditya Sahay....................................74

Gayatri Hegde .................................74

Paranjoy Guha Thakurta..................43

Sanjay Pathak..................................41

Alfred Tuinman .................................58

Gita Dang ........................................88

PavanKrishnamurthy .......................70

Satrajit Banerjee ..............................31

Amitabh Jotwani ..............................59

Henry Chesbrough ..........................46

Pravin Tapadia .................................31

Shannon Jhunjhunwala ...................74

Anurag Batra ...................................27

Ishan Mehta .....................................24

Pravin Trivedi ...................................31

Shirish Deodhar ...............................74

Anurag Krishna ................................30

Janardhan Prasad ...........................25

Prof. Suresh Bhagawatula, ..............75

Simi Sailopal ....................................24

APJ Abdul Kalam.............................60

Jayant Sinha ....................................88

Prof. Victor Manickam ......................74

Srikala Bhashyam ............................52

Ashok Alexander .............................88

Jayesh Badani .................................46

Puneesh Mehra ...............................49

Stephen Harper ...............................73

Ashok Gupta ....................................48

Joe Burns ........................................33

Rajaram Rajendran .........................83

Subhrajit Mitra .................................31

Bill Gates .........................................27

Judith Rodin.....................................73

Rajesh Kukreja ................................49

Subroto Bagchi ................................80

Brian Tracy .......................................80

Kunal Dua ........................................59

Rajiv Panthary .................................30

Sumit Datta ......................................74

Bruce Willis ......................................51

Laura Parkin ....................................88

Ramanan Raghavendran.................88

Suresh Tota......................................52

Dalvir Singh .....................................39

Lord Kitchener .................................82

Ramya Raghuram............................74

Ujwal Thakar ....................................88

Debasish Mitter................................88

Manoj Chandran ..............................73

Richard Branson ..............................80

Ved Khurana ....................................30

Deval Sanghavi................................88

Mukesh Jha .....................................25

Rob McEwen ...................................47

Vijay Anand .....................................20

Diana Wells......................................73

Mulchand Dedhia.............................24

Rohit Mahajan .................................50

Vijay Talwar ......................................88

Dr. Ajay Kela ....................................88

Neera Nundy ...................................88

Rohit Rai ..........................................61

Warren Buffet...................................27

Doing good, the new way New-age philanthropy ﬁrms are fast becoming catalysts in solving India’s biggest challenges

raditionally, philanthropy is about cheque-signing donors passively sponsoring projectdriven beneficiaries. Some of the emerging philanthropy firms cannot explain their work in such simple terms. They are giving social good new labels - “Venture philanthropy”, “Social investing” and “Philanthrocapitalism”. Philanthropy in India today is increasingly being defined by new perspectives, new focus, and a whole new set of players: entrepreneurs, technocrats and venture capitalists, who have jumped the profit line. “The rules of the game in the philanthropy space are steadily changing. There is a new way of giving and receiving support for social initiatives,” believes Deval Sanghavi, Founder and President of Dasra, an organization that helps social ventures to scale, grow and become more profitable. Over the last decade, he finds philanthropic foundations becoming more engaged and hands-on with the initiatives they are supporting, bringing in their vision, management expertise and best practices with them. Their focus: efficiency, transparency, impact and return on investment. 88

AUGUST 2010 | NEN | DARE.CO.IN

New players on the block Sanghavi, along with his partners Neera Nundy and Ramanan Raghavendran left Morgan Stanley to form India’s first venture philanthropy fund, Impact Partners, way back in 1999. “At Morgan Stanley in New York, we did due diligence on organizations while searching for companies for investors to take over. Why not apply our experience in the non-profit sector in India, by finding good-quality organizations, investing in management teams and taking organizations to scale,” he says. Today he has company. In the past five years, many corporate honchos have made a switch to non-profit sector. Jayant Sinha of Omidyar Network India Advisors, Vijay Talwar of Clinton Foundation, Ashok Alexander of Bill and Melinda Gates Foundation, Debasish Mitter of Michael and Susan Dell Foundation, Ujwal Thakar of GiveIndia Foundation and Dr Ajay Kela of Wadhwani Foundation are some who are bringing their twenty-plus experience as corporate leaders to executive roles in the social sector. “One of the reasons for their jump is their desire to give back to society. In addition, non-profit sector brings

in new challenges and opportunities where they can apply their skills and knowledge. Also, non-proﬁt organizations are now ready and willing to absorb what they bring to the table,” feels Gita Dang, Founder-Director of Talent Advisory Services. Dr Ajay Kela recently joined Wadhwani Foundation as President and CEO. He will be taking over the reins from Wadhwani Foundation Executive Director Laura Parkin, also from a corporate background. While Parkin will continue to spearhead Wadhwani Foundation’s largest initiative, National Entrepreneurship Network, Dr Kela will be launching high-impact initiatives in entrepreneurship and targeted job creation. Dr Kela was earlier heading Symphony Services, the outsourced product development company that is a part of the $3 billion Symphony Technology group, founded by Romesh Wadhwani who is also the founder-chairman of the Wadhwani Foundation. He is now applying his business acumen in the social space. “There is a strong recognition that challenges of social sector is as large and complex as those in the corporate sector, yet there are very few examples of scaled-up social

organizations. My corporate experience helps me build programs that are focused on solving the problems and impact, with measurable goals,” Dr Kela explains.

A Business Approach to Philanthropy Philanthropy is no longer about beneficiaries alone; it is the long-term and large-scale impact that counts. In recent years, Acumen Fund and Omidyar Network have entered India as social investors, providing financial and human capital to expand and scale growth-stage non-profit social ventures. Dasra’s Social-Impact programme offers three to five-year business plans to organizations that have reached a tipping point and are looking to scale. “Our focus has been to provide hands-on support by bringing in management teams and mentoring them on their business plans,” says Sanghavi. Dasra is supporting 30 social ventures under the Social-Impact programme. Meanwhile, Wadhwani Foundation aims to fund initiatives with significant pro-bono investments and supporting them until they are well established with the right models, at scale and self-sustainable before exiting. One of the new initiatives that the Foundation has recently launched is the Wadhwani Opportunities Network for the Differently-Abled, a program that will directly help train and place over 100,000 of the differentlyabled into sustainable, high quality jobs, in partnership with private and public sector employers. “We are trying to change the way one looks at philanthropy. Our approach has been to launch and support niche, high impact and high value initiatives, and play the role as catalysts to trigger large scale job creation. The only way to do this is by becoming results oriented and using business processes more and to great effect. Once the model works and demonstrates results, it be-

Dr. Ajay Kela, President and CEO, Wadhwani Foundation

comes easier to engage government and other corporates for nationwide scale-up,” says Dr Kela.

Wadhwani Foundation Launched in 2000, the mission of the Wadhwani Foundation is to accelerate economic growth in India and other emerging economies by launching and supporting high-impact initiatives in entrepreneurship, innovation and targeted job creation. The Wadhwani Foundation is the philanthropic foundation of Dr. Romesh Wadhwani, founder, Chairman and CEO of Symphony Technology Group. In just eight years, Symphony has grown from startup to a

group of eight global software and services companies with combined revenue of over $2.5 billion and 15,000 employees. Before launching Symphony in 2002, Dr. Wadhwani built three successful software companies the most recent of which Aspect Development, Inc., a leading supply chain software company, was acquired for over $ 9 billion. Dr. Wadhwani has a Master’s and Ph.D. in Electrical Engineering from Carnegie Mellon University and a B.Tech. from IIT Bombay. R

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